When it comes to buying a home, it’s undeniable that Florida has some amazing value. The markets are still down from the recession, and buyers are flocking to the sunshine state to try to scoop up a piece of the still rebounding market. While there are certainly lots of options, it’s important to know a few things before buying a home in Florida. Xome Contributors Alex Alexandrov and Bob Tankel provide their insights on what you need to know before making an offer below.
1. Market Conditions Are Always Changing
Unless your job description entails remodeling and selling homes for a profit, as a buyer you should plan on owning your next home for many years to come. Having a basic understanding of market conditions will help in deciding if your timing is good. Property values, capitalization rates, and interest rates are some of the more obvious signals you can use to evaluate how the market is behaving. Always be sure to discuss your long term goals with an experienced real estate agent, as there are often different opportunities available at different times of the year in Florida.
2. The Buyers Advantage
This is a big one! To the buyer’s advantage hiring an experienced real estate agent in Florida costs zero dollars, as agents are compensated by the sellers of real property. On the contrary hiring an inexperienced agent can prove to be very costly as it will directly affect the negotiating process and the overall flow of the transaction. Do your homework and research for qualified agents in your area of interest and make sure to interview at least two agents. Technology will give you all the answers and if not you can always turn to a friend who has already had a pleasant experience.
3. Location is Everything
Buyers in Florida often get tricked into buying a nicely remodeled home on a bad street. You never want to own the prettiest house in a bad neighborhood – location does matter. Protect your investment and let it grow by buying in a good school district, close to desired areas of interest. A great example is the Roads in Brickell. With Brickell’s amazing transformation and growth, the value in the Roads neighborhood has skyrocketed accordingly.
4. Inspections Are Key
Always do an inspection no matter how nice a property may appear on paper. Hire a licensed and experienced inspector and ensure that the bones of the property are strong, confirm that electrical and plumbing is up to date and in good working order, and ensure that all appliances are operational. An important thing to remember is not to get caught up on minor cosmetic issues if you think it will jeopardize a good deal. If you and your agent already negotiated a good deal and you are confident that the property meets your criteria, it may not be worth it to let it go if all it needs is a bit of paint in the living room and the current owner isn’t giving credit.
5. Know Your Neighbors
Are your future neighbors paying their mortgages, or in foreclosure? From 2007 until now, over 400,000 homes were in mortgage foreclosure, some of which continue today. How many owners claim homestead is a good indicator of whether there are lots of renters or owner occupants.
6. Get to Know the Homeowners Association
How many of your neighbors to be are current with their assessments? This is important to know, as the paying owners have to make up the difference. Some communities had a 30% delinquency rate or higher during the recession. Owners who pay make up for that deficit.
If you are buying in a homeowners association, you’ll also need to know whether documents have ceased to be enforceable under law. The Marketable Record Title Act (MRTA) requires documents over 30 years old or so to be extended, or they become unenforceable. Then it takes a majority of all owners to agree to revitalize them. Lawyers and title companies who close transactions are not concerned with the restrictions as they are excluded from coverage under title policies.
The article was written by two Xome Contributors.
Points 1-4 were written by Alex Alexandrov, Realtor at Barclays Real Estate Group South Beach
Points 5-6 were written by Bob Tankel, Law Partner at Tenkel Law Group