It is often said that the UK and Florida are divided by a common language. One of the ways this shows itself is the house buying process in the two countries. In the UK, in order to check out all the properties on the market, it is necessary to visit all the estate agents in your chosen area, and then sift through the newspapers and the web. In the UK, although real estate agents market properties, it is normal practice to be shown around a property by the sellers, who are usually the current owners.
In Florida all listed resale properties in an area are entered onto a computerized database (the multiple listing system or MLS), and the property details are available to all Realtors (Estate Agents), who subscribe to the MLS.
Under Florida law, anyone who advertises buys or sells real estate must be licensed (agent) by the Florida Real Estate Commission (FREC), although unfortunately there are still unlicensed persons operating. Many British English, Scottish, Welsh, and Irish buyers use agents in the UK - many of these are not licensed which means you will have no right of redress under Florida law. All licensed agents must conform to a code of practice established by FREC, as well as a code of ethics.
Quite a lot of the troubleshooting work we are commissioned to do is as a result of selection of an unlicensed or inexperienced Agent, indeed this area of work is second only to customers who have not used any agent but carried out the work themselves.
Common mistakes, made by the unwary!
One of the most frequent and potentially costly mistakes made by a British/overseas buyer is to approach the Realtor (Estate Agent) who is listing (selling) a property. The buyer has usually seen the property advertised in a magazine or newspaper, on a signboard outside the house or on the web and reacts exactly as they would in Britain and contacts the selling agent named in the advert. This can be a very big mistake - You have made contact with that selling agent, and in relation to that property there would be a strong case to say - in the event of you buying it you are their customer!
All too often it is not realized that this Florida real estate agent is acting by law, solely on behalf of the seller. Even if you just approach these selling Agents for information on the property they are listing, you may well have compromised your legal position. Although the agent is obliged by law to move to a different type of relationship if they are required to work with both the buyer and seller in a transaction, they are legally not able to disclose to you certain vital factors affecting the price you might pay on that property.
As an example, if the seller has specific financial reasons why they are selling, or if the seller would accept a lower price, indeed any information that might be detrimental to the seller or be advantageous to you as the buyer. Such information cannot ever be disclosed by an agent who is not working exclusively for you as a Single Agent / Buyer’s Broker. Only an agent working specifically for you as a Single Agent / Buyer’s Broker can and indeed is legally obliged to divulge such information.
The commission that the seller pays for listing and selling their house is split between an agent who you can choose to exclusively represent you (Buyer’s Broker) and the seller's real estate agent. Therefore you can see that if you buy a Florida property through the seller's agent not only do you lose valuable legal rights, but the seller’s agent also benefits from receiving all the commission. This obviously helps explain why there is pressure on you to buy directly from the adverts you see in the papers and magazines or on the signboards outside properties that are for sale in Florida.
The day may come when you wish to sell the property. If it is already contains a 10% premium for selling and be in an area artificially overvalued due to overselling techniques, you could be in trouble.
In a reputable agency you should certainly find a properly Licensed Realtor, however you may be in for a very nasty surprise. The real estate agent you meet could be the one undertaking desk / reception duty at the time; in some instances this will mean you have one of the most inexperienced agents in the agency who has the time to volunteer for desk work. With over 100,000 agents registered in Florida alone there are hugely varying levels of expertise, qualifications, training and competence, and nothing can be taken for granted.
· What are the levels of international experience?
· How familiar they are with the whole area? Some agents focus on only one or two developments near where they live!
· Are they familiar with the buyer’s specific requirements? (Some agents specialise in selling/listing properties)
· Are they aware of properties across the whole price spectrum in the area? Do they monitor property price trends in the area?.
· Are they just Florida property sales agents or do they have a wider appreciation of property trends in the area as well as the American and overseas economies and currency relationships? All these factors will be important if you want to eventually sell from overseas.
· Do they focus on a particular price level i.e. lower end or top end or have they experience of properties across the whole price spectrum, giving them an understanding of all markets?
· How many international buying transactions have they undertaken over the past year? (Too few and they may lack vital expertise, however if they have completed a very large number of transactions make sure you are aware of the implications if these transactions are focused on just a few developers)
· How many total transactions do they undertake a year? A top producer (agent selling a large numbers of properties each year) may not have the time you require.
· Are they full or part time? Many Agents are part time, and have a second unrelated job.
· If you wish to rent the property, do they know where this can be legally undertaken? I have lost count of how many times I have heard of overseas buyers being told an area is suitably zoned when it is not.
· Can they provide you with the details of recent overseas buyers they have worked for?
· There are a number of things to watch out for once in the car with an agent and looking at properties. You need to be shown the general area you are interested in, this means all the area, not just the scenic route. Some agents have been known to adopt the taxi driver approach i.e. taking the longer but scenic route to a favoured development and then dropping clients off with the sales staff where they are susceptible to being "lambs to the slaughter"
· You need time to find the appropriate property for you, not made to feel you are just another statistic in an agents selling schedule and you are under pressure to buy in a day or two.
· Beware the real estate agent who has undertaken a popular course on the psychological approach to property sales - it is certainly pleasant to work with a genuine and friendly Agent - but manipulative techniques are not a pleasant proposition. If they are reading your body language you need to think twice!
· Although there are many excellent and professional agents selling real estate, it's a sad fact that a Gallup poll, rating The Americans publics perception of occupations and professions in terms of honesty and integrity, placed Real estate agents in the bottom third of the rankings.
How on earth do I find a good Florida real estate agent and company?
This is a very important point. By way of explanation lets examine just one of the qualities realistically you need from your agent.
Understanding differences between the house buying process, overseas and in America. This entails a full working knowledge of at least the American and key overseas housing markets.
The implications of these differences can be of major significance. Some agents will say the differences are not important. They are, and it certainly helps to safeguard your interests if your real estate agent has this additional level of expertise and experience.
Our Agents have sold properties to clients from all over the world, in many cases to clients who do not have the time to fly to Florida to consider the options. This requires:
· Careful explanation of the options, It is not generally realized that many American agents have not travelled outside America and have limited knowledge on even basic areas such as dialing codes, time differentials, etc.
· Constantly reporting back to clients any progress, particularly with new property, regular photos and monitoring of the project can be very helpful. Continuing to help and assist clients long after their house purchase on all aspects of life in Florida
Doing things as you would in Britain can cost you unnecessary money
Let’s now consider the British visitor, thinking of investing in a new home, and imagine they have decided to use the services of a local Florida real estate agent to act as their Buyer's Agent. On a free day, they visit a new home development that they have not visited before.
They are politely asked to sign the visitors book, which they do - They are now registered on that development and may well not be able to use their own Agent, they are on their own!
It’s important to be particularly careful when visiting a new home in Florida; otherwise it can end up unnecessarily costing you thousands of extra dollars. Developers have large advertising budgets to attract you to their show houses. The agent present at the development you visit is working solely for the builder or developer. Whatever they may say, they are not independent and do not and indeed legally cannot act exclusively on your behalf. A number have very extensive sales experience including training in the psychological reaction of buyers in every conceivable scenario!
With some builders many of the features included in the show house are extras not included in the price, including items you may assume are included. With some builders the list of extras sometimes resembles the casting list of Ben Hur, and the base model is very basic. The builder’s agents can be very persuasive in suggesting a whole stack of additional mod cons that you apparently require to maintain the value of the home. They are very often on a higher level of commission for these extras, which can cover hundreds of items from sinks, tiles, carpets to even grade of paint!
This is not the case with all builders and selecting the wrong options can actually lead to a considerable loss if you sell the house in a short period of time. Other builders offer very competitive homes with many features included as standard. Being new to America how can you tell which builders' properties will have the best resale value in 5 years time?
I have refused to work with developers who insist on selling unwanted and frankly totally unnecessary extras to customers and yet it seems a very common practice.
If you would like details of agents that have extensive experience and knowledge of working successfully with our British clients please click here.
If you would like details of our briefing programme we run to ensure you are fully in the picture on the key aspects of buying a property in Florida, before spending several hundred thousand pounds – please click here.
Andrew Bartlett an acknowledged expert on property trends and relocation in Florida, writes articles and answers readers’ questions for several British publications including Florida Magazine, Escape Magazine, Place in the Sun, Homes Worldwide, Sunday Times, America, and The Red guide to buying Property in America and is regularly consulted by journalists and broadcasters. His consumer web guides have received numerous accolades.
www.MyFloridaUpdate.com
www.AndrewBartlettFlorida.co.uk
Andrew was a Senior British Government Official for 20 years before relocating to Florida several years ago, where he was headhunted to set up specialist British property and relocation teams for America’s largest estate agents Coldwell Banker and Remax.
He then established a uniquely impartial and independent relocation and property-briefing company working between Britain and Florida. He has written a number of watchdog style articles on overseas property and emigration selling techniques, and advises City investment companies on the Florida property market.
