Florida Investment Blog
In the context of homeowners associations and condominium associations, an estoppel letter is a document that provides the buyer with the details of the assessments charged by the association. It prevents the association from later claiming sums that are not reflected in the estoppel letter.
Articles Posted in Real Estate Transactions
What is Debt-Service Coverage Ratio (DSCR)?
The debt service coverage ratio is generally described as the relationship between the Borrower’s annual net operating income as it relates to the mortgage payments in a year. For example, a property with net operating income of $125,000 and mortgage payments equaling $100,000 has a debt service coverage ratio of 1.25.
What is Portability?
When somebody owns a property in Florida and then sells that property and reestablishes their homestead within two years, they’re entitled to port their tax savings from their prior home to their new home.
What is the Difference Between a Title Company and a Real Estate Attorney Handling My Closing?
A title company facilitates the purchase and the sale. They cannot provide legal advice. The attorney, on the other hand, can provide legal advice and will represent your interests. Given that a real estate purchase and sale is typically one of the most important events in a person’s life, it is strongly recommended that you higher a competent attorney to represent you in the transaction.
What is the Difference Between the Promissory Note and the Mortgage?
The promissory note is the obligation to repay. It’s the I-O-U. In Florida, the mortgage is the lien on the real estate collateral that secures the note.
What is Title Insurance and Must I Have it?
Title insurance protects you from any defects with title to the property. Essentially, there are two types of policies. A loan policy, which protects lenders. And an owner’s policy that protects the owners. Loan policies are usually required by all Lenders. Owners policies are optional, but highly recommended.
What Isn’t Covered by Title Insurance?
Title insurance will not cover any defects that are listed as exceptions on your title policy. Please reach out to our office for a more detailed explanation for the standard exceptions and exceptions listed on the title policy jacket.
What is the Foreign Investment in Real Property Tax Act (FIRPTA)?
When a foreign person sells United States real property, that is a taxable event. The buyer is responsible for withholding. The rate of withholding generally is 15% (10% for dispositions before February 17, 2016). Generally, FIRPTA withholding is not required if the buyer acquires the property for use as a residence and the sales price is not more than $300,000. The Buyer or a member of the Buyer’s family must have definite plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two 12-month periods following the date of transfer. For this exception, the Buyer must be an individual. There are other exceptions to FIRPTA withholding; however, notification requirements must be met.
When do I Get the Deed?
The deed is executed at closing, and the original is delivered to the county recorder’s office. Once recorded, the deed is returned to the closing agent, and the closing agent then delivers the deed to the buyer.
Why Should a Buyer Have an Attorney Perform a Lien Search on a Property Being Purchased?
As opposed to a title search, a lien search is a search of unrecorded matter that could affect title to the property. Without a lien search, you would not know of any building violations, any open permits, or any unpaid utility charges. It is very important prior to purchasing any real estate in Florida to obtain a lien search on that property.