Know your rights as a Buyer in Miami-Dade & Broward County
Don’t relinquish your right to select your own Title Insurance Company. You are not obligated to utilize your real estate agent or lender’s in-house title insurance company. Keep in mind not all title companies have the same fee structure, do your homework and research title companies despite what your Realtor or Lender might tell you.
Avoid getting crashed with extra charges at the closing table by an “in-house” operation. Shop around for your title insurance company just as you would your mortgage. Compare quotes and ask for any additional fees in writing. Ask about discounts for which you may be eligible, such as re-issue credits for owner’s policies and surveys.
Foreign National Sellers Watch Out: FIRPTA WITHHOLDING RATE INCREASED TO 15%
FIRPTA is a tax law passed in 1981 that requires foreign persons to pay U.S. income tax on the gains they make from selling U.S. real estate. The responsibility is on the U.S. national buyer (not the settlement agent) to deduct and withhold a portion of the amount realized (generally the sales price) and report the sale to the Internal Revenue Service (IRS). Buyers can withhold less than the statutory amount if they obtain a determination of the specific amount of tax owed by the foreign national using IRS Form 8288-B. In most cases, the settlement agent is the party that remits the funds to the IRS, but the buyer is held legally responsible. Additionally, until the tax is paid in full, the government obtains a security interest in the real property.
New guideline under the recent FIRPTA changes:
- If the amount realized is $300,000 or less, AND the property will be used by the buyer as a residence, the withholding rate is zero percent.
- If the amount realized exceeds $300,000 but does not exceed $1 million, AND the property will be used by the buyer as a residence, the withholding rate is 10% on the full amount realized.
- If the amount realized exceeds $1 million, then the withholding rate is 15% on the entire amount realized, regardless of use by the buyer.
- If the property will not be used by the buyer as a residence, withholding rate is 15% on the full amount realized.
- If the buyer is not an individual (one or more) rate is 15%.