The Sunshine State continues to be one of the nation’s most popular relocation destinations. Its year-round great weather and abundance of beaches along an extensive continuous coastline are major draws to this southeastern state. Learning how to buy a house in Florida could provide an opportunity to own an appreciating asset in the land of leisure.
So where do you begin when it comes to knowing where and how to buy a home in Florida? Fortunately, our experts can help guide you so your transition can be as seamless and stress-free as possible.
Top Destinations in Florida
First, let’s take a tour of several of the state’s top destinations to consider when house hunting
This Gulf Coast city is one of the most well-known in the state. Are you a pro sports fan? The Tampa Bay Buccaneers, Lightning and Rays have increased the city’s notoriety over the last few years by winning championships in their respective leagues.
If sports aren’t your thing, Tampa has a bustling nightlife and plenty of shopping opportunities. Sun worshippers and surfers are a short drive away from popular beaches, including St. Pete Beach, Anna Maria Island and Clearwater Beach.
For those who enjoy being near and on the water, Jacksonville could be your perfect spot. This massive city sits between the Atlantic Ocean and St. Johns River, making this port city a hub for finance and trade. Jacksonville is the largest city in terms of land area in the United States.
St. Petersburg offers the perfect blend of relaxed beach vibes and outdoor activities. This large city has seen an increase in growth over the last few years, primarily due to the expansion of Tampa. Known as the “Sunshine City”, St. Petersburg hosts great golf, fishing, and boating. The Dali Museum features surrealist art created by the famous Salvador Dali.
Miami is the economic and cultural hub of the state. Home to great restaurants, a thriving music culture and some of the world’s most beautiful beaches, this southeastern city has a variety of dwellings available, including condos and townhomes.
If you’re looking for an alternative to a traditional single-family residence and want to be immersed in Florida’s culture, Miami should be high on your list. Miami is known for it’s cultural diversity and famous art deco vibe. Wanting a quick getaway? Miami is only a 55 minute flight to the Bahamas.
Lakeland is located between Tampa and Orlando. A short drive from Disney World and several popular beaches, this small city has experienced significant growth over the last few years, which is poised to continue as thousands of people flock to the state. Lakeland’s downtown area is called the Munn Park Historic District. The area is well known for antique shops and galleries.
How to Buy a House in Florida
As you’re exploring which areas most resonate with you, let’s also look at how to make it happen.
Assess Your Financial Health
Unless you plan to pay for your new home in cash, you should start by assessing your current financial health. You should check your credit score, calculate how much money you can afford to put forward as a down payment, and decide what kind of mortgage payment you can reasonably take on.
While the exact credit score requirements will vary depending on the type of loan you apply for, you’ll typically want a credit score of about 620 or higher. This will qualify you for most conventional loans and some other options, like an FHA mortgage.
If your score is below that threshold, start paying off smaller debts such as credit cards or personal loans. You may also want to speak with a mortgage broker or financial advisor to get additional tips on raising your score.
After you have addressed your credit score, focus on the down payment. A conventional loan requires you to put down 3-20% toward a home. However, other loan options may only require you to put down 3.5%.
Lastly, you should calculate your debt-to-income ratio. This will give you a general idea of how much you can afford. Traditionally, your mortgage payment should consume less than 30% of your monthly income. Again, there is some flexibility depending on the type of loan you apply for.
Choose Your New Neighborhood
The next step is to choose your neighborhood. You can use the cities above as a starting point or simply browse through listings with a real estate agent.
When browsing through neighborhoods, you should consider things like average home values and lifestyle factors.
Once you have selected a neighborhood, start reviewing the average value of homes within that community. If the majority of the homes are well outside of your price range, then it may be difficult to find a property that fits your budget.
You should also assess property appreciation trends. This will let you know whether your home will likely build equity over time, which is extremely important if you don’t plan to make the residence your “forever home.”
Lifestyle factors refer to any attributes of the community that will impact your daily life. For instance, if you have minor children, then you may want to review the quality of the schools. Other factors that may be important to you could include crime rates, access to restaurants and cultural activities, and public transportation options.
Find an Agent and Broker
Working with an agent is always a great idea, but it is especially important when you plan to relocate to a new state. An experienced real estate agent will be able to provide valuable insights in to local communities and how to buy a house in Florida. They will also do most of the legwork for you, which can eliminate much of the stress associated with buying a home.
Before you settle on an agent, interview a few brokers to see which are most responsive to your needs.
There are plenty of great agents out there, but not all of them will be the right fit for you. Ask lots of questions to determine how knowledgeable they are about the communities you’re interested in.
Don’t forget to find a reliable mortgage broker. They’re responsible for handling the financial details of buying a home. This includes helping you compare mortgage options and answering any questions you may have.
Many sellers will not let you view their home without a pre-approval letter. A mortgage pre-approval letter indicates that you’re serious about buying a home and have the financial capacity to do so.
But the letter doesn’t just reassure the seller. It also helps you to know exactly what your budget is. For instance, let’s say you get pre-approved for a $300,000 FHA loan. This means you should limit your search to homes under this threshold.
Know that a pre-approval is based on your financial health at the time of the application. If you make a major purchase, change jobs or experience some other sort of significant financial change, the lender can rescind the pre-approval.
Your lender will reevaluate your finances prior to closing, so it’s best to avoid making any big financial moves after you receive your pre-approval.
With your pre-approval letter in hand, it’s time to start house hunting. If you haven’t yet relocated to the state, you can do this remotely. Many agents take detailed photographs and post virtual tours of the homes they’re listing, giving you a true 360-degree view of each room of the home.
When shopping for your Florida home, give your agent a clear list of priorities. Does your must-haves include a pool? Walk-in closets? Square footage requirements? These will help focus their search when identifying homes based on your wants and needs. If you’re too vague, the homes they show you may not line up with your expectations.
Submit Your Offer
Once you’ve identified a home you want to purchase, it’s time to submit an offer. There are several ways to configure an offer. You can ask the seller to cover a portion of closing costs, place a bid that is under or over list price, or include other specific seller concessions in the contract.
For instance, you may request that the seller replace a broken appliance prior to closing or that they provide a one-year home warranty.
You can include many different stipulations in the contract. However, the seller may decline your offer for a more appealing one if you ask for too much. Your agent should explain these options in great detail to ensure your offer aligns with your preferences, while having a good chance of being accepted by the seller.
Schedule Inspections and Appraisals
If the seller accepts your offer, the next step is to schedule the inspection and appraisal. You can schedule the inspection yourself or ask your agent to take care of it. Even if an agent sets up the inspection, the buyer is generally expected to pay for this service.
During the inspection, the inspector will assess different components of the home. This may include the roof, electrical system, HVAC system, plumbing and the foundation.
If the home you’re buying has a septic system, you may want to hire a plumber to inspect that as well. In the state of Florida, termite inspections are often required as well, especially for FHA or VA loans.
While the inspection focuses on the condition of the home, the appraisal assesses its value. Lenders require appraisals to verify that the home is worth what you’re paying for it.
For instance, if you’re taking out a mortgage of $300,000, then the home must appraise for that amount to qualify for the mortgage. If the home appraises for $295,000, then you may have to put forth an extra $5,000 as part of your down payment.
Appraisals protect the lender in the event that you default on the mortgage. They want to make sure they can recoup their losses if something happens and they need to foreclose on the home and sell it.
The final step to buying a home in Florida is the closing. You’ll have an opportunity to conduct a final walkthrough to verify that the property is in good condition.
While many buyers consider this process to be a formality, we recommend you conduct a thorough check of the home. This includes inspecting walls and ceilings, testing appliances and light switches, and turning on the HVAC system. Once you sign on the dotted line, any issues with the home will be yours to resolve.
When you’re satisfied with the home’s condition, get out your pen because it’s time to start signing documents. Your agent will be present and should discuss the purpose of each document as you complete the closing process.
Lending Made Easy with Agave Home Loans
Now that you know how to buy a house in Florida, it is time to start your journey. Once you’ve checked your financial health and chosen your neighborhood, it’s time to find a lender.
Whether you’re ready to find a first home, a forever home, an investment property or a vacation home, pick a lender that’s easy to work with. When you’re making the move to the Sunshine State, partner with a lender who has a strong reputation for excellence.
Agave Home Loans can walk you through the pre-approval and home-buying process. Our experienced and friendly team will help you find the best rates and the right mortgage type to meet your specific needs. Contact us today to learn more!