MIAMI REAL ESTATE

Miami Beach Real Estate Agent

Miami Beach Real Estate

Miami Beach Waterfront house

Miami Beach Waterfront house 1920

Miami real estate could be tricky if you do not have the right information.
Miami Beach has many waterfront homes with private docks.One could be yours.
Do you want to buy real estate in Miami?
Hi,I am Ed Melo I am going to provide you with everything you need to know before you buy your property in Miami.
I need you to promise something to me.
What is that?
I want you to read everything I am going to tell you before you buy Miami real estate.
Why ?
Because the information I am going to provide you could save you a lot of money and a lot of headaches also.We all make mistakes,but making mistakes with real estate is something you do not want to make.

I know,I know it is a lot of information,but you do not have to read everything in one day. Come back to the web site every day and learn a little bit more.The more information you have the easier it is going to be when it is time to buy Miami real estate.

The pictures above are from the Collins canal,alongside Dade Boulevard in Miami Beach.The house has a Venice style architecture,like many in the area.Gondoliers and a fleet of gondolas were imported from Italy to ride the waterways on romantic tours for tourists in Miami Beach.
I wonder why we do not have it anymore.
Maybe because jet ski is much faster.
I feel like I am doing a work of art by following the footsteps of all these photographers from the beginning of the last century.

WHY SHOULD YOU BUY MIAMI REAL ESTATE ?

Number one reason is the weather.
The weather is great down here,a lot of people move to Miami because they are tired of dealing with snow almost all year long.
Miami is a big city and it has everything a big city has to offer.
Good schools,good roads,good people,good neighborhoods etc...
The best areas in Miami real estate are:
South Beach,Bal Harbour,Sunny Isles,Key Biscayne,Coconut Grove,Coral Gables,Brickell area,North Miami Beach and Downtown
(I am going to have a special page for each one of those areas with more details,talking about their strengths and weaknesses,the local economy,school quality,area amenities and crime rates).
They all have a few things in common:
A lot of restaurants,near the beaches,parks,playground areas,good parking,many churches,shopping malls,good transportation,low crime rates and good schools.
When it is time to sell your property most people with children prefer areas with good schools.
More reasons.
How much do you pay in rent ?
Let's say you pay $ 800.00 every month in rent.
Do the math.
Multiply your monthly rent by 200 = purchase price of home
Example: $800 X 200 = $160,000
That means if you are paying $800 per month in rent,you would pay the same amount (approximately) per month to own a $160,000 home (saving in taxes).
As you can see,most of the time,owning a home is better than reting it.

INFLATION
You should expect an increase in your rent of about 4 percent per year. As you know your rent is exposed to increases in the cost of living.In other words,rent increases with inflation.
With 4 percent inflation per year,in 40 years your rent of $800 will go to almost $4,000 per month.
Do the math.
$4,000 x 200 = $800,000
That is like buying a house for almost $800,000
If you use a fixed-rate mortgage to finance the purchase when you buy property most of the cost is not exposed to inflation(except, for example:maintenance,insurance and taxes),although the cost of buying property increases over the years.In other words,if you buy property today,in the years ahead,you should be glad you did it.

LANDLORDS
If you own your home you do not have to subject yourself to a landlord.If you rent your home you know that it is not easy to find a good landlord.Many landlords are slow to make improvements and fix problems.

EQUITY Miami real estate
The difference between the market value of your home and the outstanding loan on that home is called home equity.
Your home equity could help you financially in many ways.
For example:

  • You could choose to trade your $300,000 home for one that costs $200,000.
  • You could end up with $100,000 in your pocket.
  • You could choose a reverse mortgage(your lender sends you a check every month,while a debt balance is built up against the property,when the property is sold the debt will be paid off).
  • Imagine when you retire you own a home free and clear of mortgage.
    The difference between your debts (liabilities) and your assets(bank accounts,mutual funds,stocks,bonds etc...) is your financial net worth.
    While you are paying your mortgage your home increases in value over the years,that's why your home becomes part of your financial net worth.

    FINANCE
    Mortgage Miami real estate
    If you are buying a $ 200,000 home and you have saved a 20 percent down payment ($ 40,000),you are in the market for a $ 160,000 mortgage loan.
    A mortgage is a loan you take out to buy a home.
    Mortgage loans are typically repaid over a 15 or 30 year time span.
    In Miami real estate there are many kinds of mortgage loans(for example:10,15,20,30 and 40 years fixed,ARM 5/1 and ARM 3/1) a mortgage lender could tell you about every option you have.

    The most popular options in Miami real estate are:
    a 15 year fixed rate mortgage and
    a 30 year fixed rate mortgage.

    In both options the interest rate stays fixed as the name says.
    This is how much you would pay per month for a $ 160,000 mortgage loan (remember rates vary,this is just an example):
    $160,000, 15-year mortgage at 5.625 percent = $1,318 per month
    $160,000, 30-year mortgage at 5.875 percent = $ 946 per month

    Shorter term loans are a little less risky for lenders in Miami real estate,that's why the interest rate is a little lower on a 15 year mortgage.On the other hand the monthly payments are higher for the 15 year mortgage because you're paying off the same size loan 15 years faster.
    A 15 years mortgage is a better option,because after that period your monthly payments disappear,your total payment and interest are less than a 30 years mortgage.

    As you can see below:
    A 15-year mortgage equals $237,240 in total payments and $77,240 in total interest
    A 30-year mortgage equals $340,560 in total payments and $180,560 in total interest

    I showed you a simplified mortgage,now let's see it in more details:

    Miami real estate rate 5.625%
    Your Loan Summary
    Mortgage information
    Loan program 15 years fixed
    Loan amount $160,000
    Property value $200,000
    Property type Single family
    Property State Florida

    Monthly payments
    Principal & Interest Payment $1,318
    Property Taxes $167
    Property Insurance $42
    Total Monthly Payments $1,527

    Miami real estate
    Cash to close
    Closing costs $4,758
    Escrow/Impound $1,444
    Total cash to close $6,202

    Closing Costs and Escrow Estimates
    Closing Costs Estimate

    Closing Fees
    Notary Fee $40
    Recording Fee $50
    Search & Exam Fee $150
    CLTA including ALTA $400
    Closing Fee (Escrow) $175
    Tie In-Set Up Fee $50
    Survey Fee $250
    Florida Intangible Tax $560
    State Tax Stamps $320
    Florida Form 9 $160
    Total Closing Fees $2,155

    Lender Fees
    Appraisal $300
    Credit Report $15
    Application Fee $95
    Tax Service $78
    Processing Fee $475
    Flood Certification $15
    Document Transmission $25
    Loan Origination Fee $1,600
    Total Lender Fees $2,603

    Total Closing Costs: $4,758

    Escrow and Prepaid Estimate
    Prepaid Interest $1,111
    Property Taxes $333
    Total Escrow And Prepaid $1,444

    Miami real estate rate 5.875%
    Your Loan Summary
    Mortgage information
    Loan program 30 years fixed
    Loan amount $160,000
    Property value $200,000
    Property type Single family
    Property State Florida

    Monthly payments
    Principal & Interest Payment $946
    Property Taxes $167
    Property Insurance $42
    Total Monthly Payments $1,155

    Miami real estate
    Cash to close
    Closing costs $4,758
    Escrow/Impound $1,131
    Total cash to close $5,889

    Closing Costs and Escrow Estimates
    Closing Costs Estimate

    Closing Fees
    Notary Fee $40
    Recording Fee $50
    Search & Exam Fee $150
    CLTA including ALTA $400
    Closing Fee (Escrow) $175
    Tie In-Set Up Fee $50
    Survey Fee $250
    Florida Intangible Tax $560
    State Tax Stamps $320
    Florida Form 9 $160
    Total Closing Fees $2,155

    Lender Fees
    Appraisal $300
    Credit Report $15
    Application Fee $95
    Tax Service $78
    Processing Fee $475
    Flood Certification $15
    Document Transmission $25
    Loan Origination Fee $1,600
    Total Lender Fees $2,603

    Total Closing Costs: $4,758

    Escrow and Prepaid Estimate
    Prepaid Interest $798
    Property Taxes $333
    Total Escrow And Prepaid $1,131

    DOWN PAYMENTS MIAMI REAL ESTATE
    Saving 20% of the property price for down payment plus closing costs is not easy sometimes.
    Some down payment options:
    Low down payment loan program
    Do you have excellent credit ?
    If the Answer is yes maybe a low down payment loan program could help.
    You could buy property with as little as 2 to 10 percent of the purchase price,through low down payment mortgage programs offered by some lenders.
    You are going to need PMI (Private Mortgage Insurance).
    Expect higher interest rates and worse loan terms.
    Seller financing
    Be suspicious when a seller offers you seller financing,he could be trying to sell you a house full of problems,make a good inspection first.
    Some sellers could offer you a second mortgage to help you buy the property,because they do not need the money right away.This financing is usually due and payable in 5 to 10 years,this allows you enough time to refinance your mortgage in better terms before the seller's finance comes due.
    80-10-10 financing
    A lender makes a 80 percent first mortgage,you make a cash down payment of 10 percent of the home's purchase price and you get a 10 percent second mortgage(from the same lender or from the seller financing)
    Get a partner.
    Find a partner with similar interests to purchase a duplex or triplex together.
    Make sure you have a partnership agreement prepared by a lawyer that explicitly delineates all the issues that could appear during the partnership.
    A partnership agreement is very important because you could face major disagreements down the road.

    CLOSING COSTS Miami Real Estate
    Above I give you an example of how much your closing costs could be and here I give you a more general explanation.
    Fees vary by location and property cost.
    You will have to pay fees for the services of several parties on the closing day.
    Some typical fees:

  • Loan fees.
    You could be charged all sorts of fees,for example:
    loan-origination fee(from 1 to 3 percent of the loan amount),processing your application fee,preparing loan documents fee,appraising the property fee, pulling your credit report fee and preparing loan documents fee.
  • Closing fees.
    To cover the cost of handling the purchase documents.
  • Homeowners insurance.
    The price of the insurance is going to depend on the kind of coverage you want and the value of your home.
    At the time of the closing many lenders want you to pay the first year's premium on your insurance policy.
    This insurance is mandatory,it protects your investment in the property (example: furniture,appliances,etc...) in case it is stolen or damaged.
    You should shop for insurance 6 months before the date of purchase of the property.
    Tell the insurance agent the location and cost of the property and ask him for an estimate.
    Remember the higher the deductible the lower the cost of the insurance.
  • Title insurance.
    There is a possibility that the person selling you the home doesn't legally own it.Title insurance protects you and the lender against that.
    The price of the insurance is going to depend on the home's purchase price.
  • Property taxes Miami real estate.
    The cost of taxes are going to depend on the date of closing and the home's purchase price.
    Miami Dade County Tax Collector's office sends you in November an annual bill for property taxes when you own property in Miami.
    Taxes become delinquent on April first.
    The taxes are based on the value and address of the property.
    The Miami Dade County property appraiser determines the value of your home for tax purposes and the Miami Dade County Tax Collector's office decides how much money is necessary to provide services.
    The municipal governments set the millage rates for properties.
    They are a little bit complicated to understand sometimes.
    To estimate your property tax subtract the exemptions from the assessed value,multiply the results by the millage rate, and divide it by 1,000.
    For example:
    $200,000 in taxable value with a millage rate of 10.0000 divided by 1,000 would be $2,000 in taxes.
    This is an example of taxes from a property located on 40 th st in Miami Beach.

    2006 REAL ESTATE PROPERTY TAXES Miami real estate
    NOTICE OF AD VALOREM TAXES AND NON-AD VALOREM ASSESSMENTS
    ASSESSED VALUE 739,799
    MUNICIPALITY MIAMI BEACH
    Ad Valorem Taxes
    Miami real estate
    Taxing Authority/Millage rate per $1,000/of Taxable Value/Taxes Levied
    SCHOOL BOARD / 7.69100 / 739,799 / 5,689.79
    SCHOOL BOARD DEBT SERVICE / .41400 / 739,799 / 306.28
    FLORIDA INLAND NAVIGATION DISTRICT / .03850 / 739,799 / 28.48
    SOUTH FLORIDA WATER MGMT DISTRICT / .59700 / 739,799 / 441.66
    EVERGLADES CONSTRUCTION PROJECT / .10000 / 739,799 / 73.98
    CHILDRENS TRUST AUTHORITY / .42230 / 739,799 / 312.42
    COUNTY WIDE OPERATING / 5.61500 / 739,799 / 4153.97
    COUNTY WIDE DEBT SERVICE / .28500 / 739,799 / 210.84
    LIBRARY DISTRICT / .48600 / 739,799 / 359.54
    CITY OF MIAMI BEACH OPERATING / 7.37400 / 739,799 / 5455.28
    CITY OF MIAMI BEACH DEBT SERVICE / .29900 / 739,799 / 221.20
    Non-Ad Valorem Assessments
    Levying Authority - Rate - Footage/Units - Amount
    Combined taxes and assessments (gross amount) for 2006 : $17,253.44
    Total Value : 739,799
    Exemptions : None
    Gross Total Taxes:
    Ad Valorem Miami real estate 17,253.44
    Total Gross: 17,253.44

    Sometimes mistakes are made during appraisal.
    If you think your appraisal is incorrect stop by the Miami Dade County Tax Collector's office (111 NW 1 St Downtown Miami) as soon as you receive your notice of taxes (august),if they cannot help you,you may file a petition to be heard before the Value Adjustment Board.
    The Appraiser finds the value of your property using several approaches:
    Through comparing the value that properties are being sold in your area in similar conditions,through calculating how much it would cost to construct your property today,through finding out how much money you make if you rent the property,through calculating the cost of maintenance,insurance,improvements,natural disasters etc...
    The bottom line is:
    If the market changes (up and down) so does the value of your property.


  • IRS
    Miami real estate
    When you file your annual income tax return (Form 1040) the IRS allows you to deduct part or all mortgage interest and property taxes.
    You may deduct all property taxes,you may deduct the interest on the first $1,000,000 of debt and the interest on a home equity loan to a maximum of $100,000.
    Points are tax deductible.
    What are points in Miami real estate ?
    Points are interest paid up front.
    In our example you want to borrow $160,000.
    Lender number 1 offers you 5.625 percent interest rate on a 15 year fixed rate loan and charges one point (One point is 1 percent of the amount that you're borrowing).
    Lender number 2 offers you 5.875 percent interest rate and does not charge you any points.
    The 5.625 percent loan costs $1,318 per month.
    The 5.875 percent loan costs $1,376 per month.
    You save $58 per month with the 5.625 percent loan, but you have to pay $1,600 in points to get the discount.
    Which lender offers you a better option ?
    Do the math.
    1,600 (cost of the points) divided by 58 (monthly savings) equals 27.58 .
    That means it would take you 28 months (a little more than 2 years) to recover the cost of the points.
    58 times 180 (15 years) minus 1,600 = 8,840 (total savings)
    Those $ 1,600 that you paid up front saved you $ 8,840 in the long run.
    Lender number 1 offers you a better option if you are planing to keep the loan for more than 28 months.
    Remember:
    The more points you pay on a mortgage in Miami real estate the less should be your interest rate.
    Track the amount that you spend on improvements because the IRS allows you to deduct home improvement costs from your profits before paying taxes on them,when it is time to sell the property.
    If you are single you could deduct from federal taxation up to $250,000 and if you are married up to $500,000 ,if you have been living in the property for at least 18 months.
    You do not owe any tax on the sale of your property if your profits are less than your permitted exclusion,but if your profits are higher than that you pay tax on the amount that exceeds the limit.
    Consult your accountant for more information.
  • Legal fees.
    You might need to pay legal fees to a lawyer if he is involved in the purchase of the property.
  • Inspections.
    Never buy a home without inspecting it first. Hire a home-inspector.It could cost you from $ 100 to $ 1,000.Depending on what will be inspected and the size of the property.
  • PMI (Private mortgage insurance)Miami real estate.
    You are probably going to need PMI if your down payment is less than 20 percent of the value of the home.
    Your property is the lender's security for the loan,imagine if the property burns to the ground,the lender has 80 percent of the purchase price in ashes.
    PMI protects the lender financially if you default.
    Unfortunately PMI could add thousands of dollars to the cost of your loan.
    Good news in Miami Real estate:PMI is not permanent.
    If you can prove through an appraisal that you have at least 20 percent equity in the property (property value minus loan balance) you could not be required to pay PMI anymore.
    A common way to enhance the value of the property is through improvements (a modern kitchen for example).
  • THOSE ARE THE MOST COMMON CLOSING COSTS IN MIAMI REAL ESTATE.

    Which one is better
    PREQUALIFICATION OR PREAPPROVAL
    in Miami real estate ?

    Prequalification is an informal discussion based on what you tell the lender.
    The lender does not check the information you provide him and does not guarantee you a loan when you are ready to buy the property.
    The lender gives you a prequalification letter and does not charge you for that.
    Preapproval is based on documented information.
    The lender checks your bank accounts,income,employment situation etc...
    The lender gives you a preapproval letter and charges you for that most of the time.
    Advice:
    If a lender does not charge you for preapproval his loan terms could not be the best for you.
    Preapproval is better than prequalification in Miami real estate because if you are preapproved you cannot have your mortgage application denied and you have advantage over buyers that are only prequalified.

    CONDO MIAMI REAL ESTATE

    Why buy a condo ?

    Because most of the time a condo is much cheaper than a house and it generally costs less to maintain.
    A condo could have very expensive amenities,that you could probably not be able to afford in a house, like:gyms,saunas,Olympic swimming pools,tennis,basketball and volleyball courts,etc...

    Why not to buy a condo ?

    Before buying a condo you should check:
  • The operating budgets and financial statements of the building looking for poor management.
  • Increases in the home owners association expenses (that should not be much higher than the inflation rate).
  • The rules of the condominium (some are too restrictive).
  • Find out if the condominium is involved in litigation.
  • Read the CC&Rs (Declaration of Covenants, Conditions, and Restrictions) it has almost everything you need to know about the condominium.
  • If you are buying a new condo you should check earlier projects done by the same developer.
  • You must have the entire property inspected (not only your unit).

  • In a condominium you have much less privacy than in a house,when you share walls anybody could hear you and you could hear anybody.
    If your neighbors rent their units to strange people every month,that could be a problem.
    If you find something wrong with the operating budgets,financial statements, CC&Rs,parking,heating,cooling systems or elevators,look for another condo to buy.

    HOUSES MIAMI REAL ESTATE

    Why buy a used house ?

    Why not to buy a used house ?

    Why buy a new house ?

    Why not to buy a new house ?

    There is a lot more coming up about Miami real estate

    The Miami Real Estate Agent.

    A good agent's negotiating skills and knowledge of property values could save you thousands of dollars.
    An agent can help you find a home that meets your needs, negotiate for that home on your behalf, supervise property inspections, and coordinate the closing.
    Agents often have useful leads for mortgage loans.
    Are you interested in purchasing real estate in Miami ?
    If yes,I can put you in contact with some of the best Miami Real Estate Agents.
    They are licensed and they have many years of experience.
    Please give us some information about you:
    your name,e-mail address,phone number and a brief description on what kind of property you are looking for (new,used,condo,house,how many bedrooms etc...).
    Your information is confidential.
    A Miami Real Estate licensed agent will contact you as soon as possible.
    Please fill in the form below:

    Contact us Miami Real Estate Agent

    First Name*
    Last Name
    E-mail Address*
    City
    State/Prov
    Country*
    Home Phone
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    Please give us a brief description on what kind of property you are looking for (new,used,condo,house,how many bedrooms etc...).
    A Miami Real Estate licensed agent will contact you as soon as possible.

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