You want to be as calm and objective as possible when you decide to make an offer on a house in Florida, but finally locating a place that says “home” to you is a pretty exciting and emotional experience.

It can be difficult to put all that enthusiasm aside while you weigh the asking price against what you think the seller might accept.

And, it can get tricky. If the price you say you’re prepared to pay is way too low, you run the risk of irritating the seller, who might respond indignantly by becoming completely inflexible. On the other hand, you don’t want to agree to a price that’s higher than it should be, either. Your mortgage lender is going to conduct an independent appraisal of the property before any loan is approved. If the contracted price is in excess of what the appraiser says the property is worth, financing is going to be tough to obtain.

Watch out, for instance, for the house that’s been upgraded beyond the rest of those in the neighborhood. While it might be great to own the best house on the block, an appraisal won’t assign much value to the niceties the owner expects you to pay for.

Agent Advice

Making your offer is the stage at which your real estate agent’s expertise is going to be invaluable. An agent will be able to provide you with “comps” – comparative selling prices for similar properties in the neighborhood. Comps are very important because the lender’s appraiser is going to be looking at them, too.

But make sure the comps you see are very recent – not more than a few months old. In today’s volatile real estate market, last year’s comps don’t mean much. They’re already outdated and could be much too high or too low.
An agent will also be able to tell you how long the house has been on the market. If it’s a new listing, chances are there’s less room to maneuver on price than there might be if the house has been on the market for six months or a year.

You’ll also want to take into consideration the condition of the property. If major repairs need to be made, the price ought to be reduced – or may have been reduced, already, to reflect those flaws. However, an agent will be tactful when discussing defects with the seller.

Just remember, in your negotiations, you can always go up, but you can’t come down. Because a little haggling over price is often necessary in real estate, be prepared for counteroffers, and general financial gamesmanship, and don’t let it get to you. Remain patient.

But don’t let the bargaining go on too long, or another buyer is liable to walk off with the prize before you know it. And if you’ve found what you think is a real bargain, don’t hesitate. Be prepared to give a binder, also known as “earnest money.” A relatively small sum that indicates you’re serious, earnest money can be a few thousand dollars (generally 1% of the purchase price), but it can vary depending on the asking price. It will be applied to the purchase price and is refundable. It will signal your good faith. Then try to go to contract as quickly as possible.

Going to contract means both you and the seller will sign an agreement outlining all the terms of the sale. When you sign it, you’ll be expected to come up with a substantial down payment (commonly 5% – 20%) within a specified period of time, which usually means in a few days or less. The contract itself should make clear who gets this money to hold until the sale itself is concluded at the closing.

In St. Johns County, the specific down payment amount will depend on your financial situation, credit score, and the type of mortgage you choose. It’s always a good idea to consult with a local mortgage professional to determine the best down payment option for your individual circumstances.

Before you sign a contract of sale, you may wish to have a competent real estate attorney look it over first and discuss it with you. There are going to be words you will be hearing for the first time, or haven’t heard in a while, and you must understand what each means before you sign.

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What’s In It?

In general, as a buyer you want to be sure any contract you sign gives you an out, with a refund of your deposit if your financing doesn’t come through. That is known as a mortgage contingency.

A closing date will be written in the contract, and you will want to make sure the date is realistic. Expect to spend three to five weeks putting together your· financing and ask for that amount of time. Sellers like to schedule closings as quickly as possible because that’s when they get their money. If you can’t meet a closing date, usually two to three weeks after securing financing, you won’t be penalized (unless the contract contains a “time is of the essence” clause), assuming you’re trying in good faith to complete all the requirements of your loan. But you shouldn’t agree to a date you can’t possibly meet.

The contract also should release you without penalty if a professional inspection reveals major problems. You can try to get the seller to make the contract conditional upon the sale of your current house, but don’t be surprised if that clause in the contract is turned down.

You must, however, insist that the contract include a paragraph that states the house and land upon which it sits conform in every way to all local, state, and federal regulations regarding real estate. This information, incidentally, is standard in pre-prepared real estate contracts.

You don’t want to get stuck with a house you can’t move into because it doesn’t have a certificate of occupancy, for instance.

You’re not home free quite yet, but you’re a lot closer to becoming a homeowner.