Well, I've stirred up a hornet's nest in Florida. The seller has stamped his foot and said no to a reduced price. I suppose I can understand his frustration, after he's attempted to fix things up.
From my point of view, he did the wrong thing by advertising the incorrect HOA fees but I've come around a bit today after checking out other for-sales - it seems he put in the one bedroom, one bathroom HOA fee, instead of the 2 bedroom, 2 bathroom. I don't know whether it was deliberate or not on his part, but I've decided to put it to one side.
Even with the increased HOA, we will be able to meet our ongoing costs and, when we sell, we will hopefully make enough of a profit to replace the money we've redrawn on our mortgage, make up for the lost interest payments and knock off a fair chunk of our debt on our house in Australia. Remember, this is a 5-10 year plan (no get rich quick for us).
So, it looks as though we're going to closing on 31 December, with the original price. Other costs, including legal, company establishment, title company and inspection fees have totalled around $5000-$6000.
How we've saved money:
- Buying directly from the owner (save real estate commission fees)
- Buying in the USA (no stamp duty fees)
- Using OzForex for the money transfer (saves about $1500 in better exchange rate and lower transfer fees than the banks)
Here's how I'd do it, if I was to do it again with my new-found wisdom:
Step 1: Get an accountant's advice before even looking at buying property overseas - I did this and would recommend it to you too - everyone is in a different position. It would be wise to seek advice on your financial position and how you would best set up the deal - as an individual or under the company structure. Don't follow blindly - get advice.
Step 2 - Research. I researched the US property market for about 12 months and was confident when I dived in. That confidence has flailed about a bit over the last month, but I think that the research certainly made some difference. In saying that, I don't know whether you will have 12 months to ponder, with the market strengthening again in the US. Interest rates are rising over there, which is a sure sign that they think they're on the road to recovery.
Step 3: Check the facts with the condominium complex and with the county appraiser - if I had checked first, I would have found the HOA fees were wrong and been able to verify the taxes. The appraiser's site also gives details of how much the owner paid for the property and when.
Here's the site for Orange Country Appraiser. I could have made a more informed decision to pursue the deal or not at that stage, before spending any money. In this case, I have been lucky, because it's turned out to be OK - but it could have gone the other way too.
Step 4: Get a property inspector involved prior to engaging a lawyer. If the inspection is OK, go ahead. If you're not happy with the inspection, don't waste any further time and money. The inspection will cost around $300 - better to waste $300 if you need to walk away than invest in legal as well, which might also go down the gurgler if you decide to pull out.
Step 5: If you're still right to move forward, engage your own lawyer. Make sure he or she is approved by the bar association in the state you're buying the property.
Step 6: Set up an OzForex account so that you can transfer money overseas (without lots of fees and with the added advantage of a better exchange rate).
