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8 Steps to Buying a House in Florida

Buying a house in Florida is an exciting adventure, but could get you into dire financial straits if you don’t follow the right plan. Your best bet is to work with an experienced local agent. Follow our guide to making all the right moves when shopping for your new home.
Buying a house in Florida is an exciting adventure, but could get you into dire financial straits if you don’t follow the right plan. Your best bet is to work with an experienced local agent. Follow our guide to making all the right moves when shopping for your new home.

Buying a house in Florida is a romantic and exciting adventure at any age. As more boomers are retiring and millennials have become the fastest growing market of home buyers, the landscape is changing. With a little bit of knowledge and an experienced agent by your side, you’ll ensure that you get the perfect new home for the right price.

Here are the eight steps you have to take when buying a house in Florida.

Step 1: Evaluate Your Current Financial Situation

Your finances are going to be your first hurdle in the long process of finding a home. Rather than ending up in a situation where you can’t afford the home that you’ve purchased, you need to assess your income, debts, and overall stability.

The standard rule for determining how much you can afford to spend on your living expenses is 35% of your net post-tax income. This is the magic number that you need to use to guide all of your decisions around what kind of house you can buy in Florida.

You also need to take a look at your credit score. Lenders will determine how much they’re willing to give to you based on how well you’ve done with debt in the past. Make sure you pay off any problem debt on your record and look for any inconsistencies on your credit report before seeking out financing.

You also need to think about what committing to buying a home really means. It means that you’re going to be in that area of Florida for years to come. Mortgages come in standard 15-year or 30-year lengths, which isn’t ideal if you’re thinking of leaving in about five years.

Make sure you’re ready to put down roots before you invest in buying a house in Florida.

Learn More: 7 Requirements You Need to Meet Before You Can Buy a House

Step 2: Find a Great Florida Real Estate Agent

It’s vital to get yourself an experienced local agent when you’re seeking a home to buy. Since the seller is going to end up paying for your agent’s commission, there’s no sense in not getting the best agent that you can.

A top-rated agent in the region of Florida where you’re looking for a home is going to have knowledge that you don’t. They’ll know where home values are going up, where the best places to invest are, and what type of home is perfect for a buyer like you.

With all of the costs and fees that you’re going to incur along the way, having an experienced agent means that you have someone who knows where to cut costs. A Clever Partner Agent is one of the best choices you could make because if you buy a house for more than $150,000, you qualify for a $1,000 rebate.

This can help you pay for closing costs or other expenses that come up along the way when buying a home.

Learn More: What Does a Real Estate Agent Do for a Buyer?

Step 3: Read Up on Local Real Estate Market Trends

Ask nationwide housing experts and they expect a slowdown coming in 2020, but as of now, the Florida market is still hot.

In places like Miami, Tampa, and Orlando, investments come in from both snowbirds and locals looking to move into a new place. As boomers continue to retire at a rapid rate, there are more people interested in Florida properties. Prices will remain strong as long as there are as many people retiring as have been in recent years.

Looking at year-over-year trends, the Florida market has been climbing ever upward for at least seven years. If this doesn’t make you want to celebrate, then you’re not thinking about what it could mean. Even as Ft. Lauderdale prices have slowed some, the median value of a home being sold right now is around $495,000.

This is a strong signifier that the market is strong.

With the help of an experienced local agent, you can ensure that you choose the right time of year to save money on a home. While sellers will tell you that July is the best time to list a home in St. Petersburg for a higher closing in September, it turns out that buyers get the best deal much earlier. You can buy a home for 8% less than you could in other parts of the year if you buy it in February.

Since prices have such a strong tendency to fluctuate, you need an experienced local agent at your side. They’ll ensure you time your purchase perfectly.

Learn More: Will it Be a Buyer’s or Seller’s Market in 2019?

Step 4: Get Pre-Approved for a Mortgage

When you find the perfect house, you don’t want anything in your way. You want to ensure that the seller knows that you’re a buyer who is ready, willing, and able. The best way to prove this to them is by coming with a pre-approval letter.

If you’re new to real estate, you might hear people use “pre-approved” and “pre-qualified” interchangeably. However, they have two very different meanings. In fact, getting pre-qualified is more of a precursor to being pre-approved.

When you apply for pre-qualification, you’ll provide your potential lender with information about your income, assets, debts, and credit score. They’ll give you an amount that you’re pre-qualified for based on this information.

The problem with this is that everything here is self-reported. In order to become pre-approved, you need to provide hard evidence of everything. That’s what makes being pre-approved much more legitimate of a position than being pre-qualified.

Be sure that you only apply for pre-approval when you’re ready to buy a home. Each pre-approval causes a hard inquiry on your credit report, which makes your credit score drop just a little. These inquiries go away after a couple of years but in the interim, they bring your whole application down a little.

Learn More: Pre-Approval vs Pre-Qualification: What’s the Difference?

Step 5: Start House Hunting

Now that you’re armed with a letter telling potential sellers what you can afford, you can start searching for the home of your dreams. The only thing you need to do is to figure out what you want out of your dream home.

Start with location. You need to figure out which city or which neighborhood is ideal for you. Consider your commute to work or school and the commute of your kids, as you want everything to be as convenient as possible.

You’ll need a certain amount of space If you’re looking to upgrade from the place you’re currently living, consider how much square footage you have now. Decide on a number of bedrooms necessary for you or your family. Make sure you have adequate storage but remember that if you have the space, you’re more likely to fill it, whether you need to or not.

Don’t get hung up on things that can be changed. Appliances, wall colors, and even a toilet can be replaced. However, it’s much harder to build a new porch, replace your roof, or make repairs to your foundation.

Keep an eye on what matters and make sure you’re making decisions based not on things you can change, but on things that you can’t.

Working with an experienced agent can help you ensure that the home that you’re buying is going to build value over time. You’ll know that neighborhood you’re moving to is safe and has good schools when you work with an agent local to the region.

Learn More: Free House Hunting Checklist

Step 6: Make an Offer

Making an offer can be a long and drawn out process. If you find a home that you’re interested in, your agent is going to reach out to the seller’s agent to see if there are any bids.

If there are, it means that you have to outbid them. If there are no bids on the house yet, you might be able to bid lower than the listing price. Your agent will advise you on how low you can go without either insulting them or not looking serious.

In up to three days, expect to get a response from the seller. It might be an acceptance or it might be a counteroffer. It’s typical for this cycle to go around at least twice before you land on a number.

If you’re working with an experienced agent, you might be able to come up with a perfect offer on your first try.

Learn More: How to Make an Offer on a House

Step 7: Inspections and Negotiations

Before your lender will fork over the money, they’ll often require you to conduct an inspection and an appraisal on the home. These will allow the lender to find out whether or not the home is truly worth what the agreed upon price is.

The inspector is going to walk through the house and then around the perimeter taking notes. Feel free to join them and to ask questions regarding any concerns with the home. When you see what they’ve noted as being an issue, you can try to use this information as leverage.

If you see something pricey needs to be replaced but you’re still interested in the home, then you can ask for a “seller credit.” This allows you to bring the price down to something that suits your budget better.

In a Florida home, make sure that you’re asking about sinkholes, either in the past or present, and whether there are any other environmental hazards abound. While this is supposed to be disclosed, some home sellers will try to skip this step.

This aspect of negotiation requires you to have an agent who knows how to play hardball. The better they are, the better of a deal you’ll get.

Learn More: 3 Ways Inspections Help Home Buyers Get Better Deals

Step 8: It’s Closing Time!

Now that you’re finally through the process, you might be ready to rejoice and start picking out furniture. However, you still need to go through the closing process. This is a long and arduous process for some buyers while being easy for others. One of the most important things to know is that you have to be prepared to spend some money on your closing.

According to Bankrate, the current cost of a closing in Florida is around $2,206. However, this doesn’t paint the full picture, because there are so many variable fees. Between taxes, fees, and title charges, you should budget a considerable amount of money for closing, typically around 3% of the final closing price.

If the median home value in Florida is $233,700, that means you need to put aside an additional $10,000, at least, before you move in.

You also have to worry about transfer taxes, which municipal governments charge to help build infrastructure. These charges are a big surprise to come and can cost as much as $0.70 for every $100 in the value of the property. For a median-valued home, that’s around $1,636.

Navigating this whole process on your own is long and confusing. Markets can vary wildly between zip codes and the only real way to prepare is to work with an experienced local agent. They’ll ensure that you set expectations that make sense for you and that you don’t overspend along the way.

Contact us today to get connected with a Clever Partner Agent to help you buy a home in Florida.

Learn More: 4 Things Buyers Need to Know Before Closing on a House


Jamie Ayers

Jamie is the Director of Content at Clever Real Estate, the free online service that connects you with top real estate agents and helps you save thousands on commission. In the past, Jamie has managed columns for clients in a variety of leading business publications, including Forbes, Inc., CEO World, Entrepreneur, and more. At Clever, Jamie's primary goal is to provide home sellers, buyers, and investors with the information they need to successfully navigate the ins and outs of the real estate industry.

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