Buying in Florida? Six Steps to Success
By Patricia Tan
Buying a home in Florida is a very big step, whether you are from the northern states or outside the country. Many of our overseas customers ask us “What are the most important things for us to consider when looking to buy a home in Florida?”. I usually share a number of key points with them – things they should do to ensure their Florida property investment is a success, and I am happy to share those here.
Understand Your Motivation
Why do you want to buy a home in Florida? How will you use it – winter/retirement home, family vacations, vacation rental, purely an investment property, or a combination of these things? How you intend to use the property will influence your choice of location and the property style and size. Some homes are not zoned for vacation rentals. While Orlando has many homes specifically aimed at holiday lettings, coastal areas have a limited supply of such homes, and you will need the help of an experienced local agent to identify them.
Establish a Budget
Decide how much you can afford to spend, and whether you will purchase with cash, or obtain a mortgage. If you wish to finance the purchase, mortgages for foreign nationals are available in Florida. Typically they will require 30-35% deposit and proof of your assets and income. Alternatively, you may wish to release capital from a property you already own in your home country.
Location, Location, Location
Florida is a huge state – more than 170,000 sq km. You really need to have a feel for where you would like to purchase. Miami and Orlando/Kissimmee are the leading locations for international investment in Florida, but they are closely followed by some coastal areas such as Fort Lauderdale and West Palm Beach on the east coast, and Sarasota/Bradenton and Naples on the west coast. Orlando is perfect if you plan to spend shorter periods of time in Florida and make regular visits to the many theme parks in the area. A coastal area may be more suitable if you plan on extended stays and would appreciate the opportunity for broader-based activities. Longer stays will allow you to explore the beaches and coastal waterways, indulge in golf and water sports, or spend time enjoying Florida’s cultural offerings: theatre, music, art, museums and much more.
Understand the True Costs
It’s not enough to know the cost of the property. You need to consider “closing costs” and cost of ownership. Closing costs are associated with the process of a buying a home. They may include inspections, stamp duty, title insurance, property taxes and building insurance for instance. If you pay cash for the property, budget 2.5% of the purchase price to cover closing costs. If you have a mortgage, the closing costs may be significantly higher. You should also consider the ongoing cost of ownership. Florida’s gated communities with resort style amenities come at a cost. Be sure you understand the Home Owners Association (HOA) fees and property taxes, and factor these into the annual running costs of the property.
Plan Early for Your Currency Needs
Even a slight movement in the exchange rate between your home currency and the U.S. Dollar can mean a big difference in the actual cost of the home. Early in the process, establish a relationship with a specialist foreign exchange company who will help you change funds at the best possible time and rate.
Choose an Agent, not a House
The property market in Florida is structured in such a way that a single real estate agent has access to all resale properties that are being offered for sale. A good agent will also know local builders and new construction options in their market. Your chosen agent works for you, not for the seller. Typically your agent will share in the seller’s agent’s commission, so their services are free to you as a buyer. All agents in Florida must be licensed by the state, and there are more than 127,000 of them! Try to locate an agent who is a Certified International Property Specialist (CIPS) – this indicates they have gone through additional education to make them more effective at serving overseas buyers.
Good luck with your search, and may you enjoy your Florida home for many years to come.
[1]Patricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com [2].
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