Buying a house can be an exhaustive process, especially if it is in a new state you are unfamiliar with. How do you know what the local market is like, what real estate taxes to expect, or what kind of appreciation you can expect?
In Florida, this doesn’t have to be a painful process. By following this guide, and working with an experienced, local real estate agent, you can get the inside track on when to buy and how much you can expect to pay when purchasing a home in Florida.
How to Find a Florida Buyer’s Agent
The first step any would-be buyer should take is to partner with a great, local buyer’s agent for guidance and support throughout the home buying process. A local agent will know the latest market trends, inventory reports, and will be able to help find you deals that fit your budget and preferences.
An experienced real estate agent will work with you to uncover your needs, what type of neighborhood you are looking for, and locate those homes that fit your budget. Agents have access to various listing services, as well as the existing network to find off-market or other hard to find listings.
A great agent will also help you save money throughout the process. Clever can connect you with experienced, local agents from major brands and brokerages (Keller Williams, Coldwell Banker, etc.), who have agreed to work for a flat fee, or low commission to save you money on your home search.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Florida Housing Market Forecast for 2019 — and Beyond
Over the last 12 months, home values in Florida have gone up 6.3% and are expected to rise over 3.5% in the coming year. However, across the state market conditions can be quite different.
In Miami, home prices increased 3.8% over the past year, but values are $100,000 above the state average of $230,000. While Miami still expects growth over the next year, it will likely continue to underperform statewide averages.
The Tampa area on the other hand, increased almost 8% over the past year, and expects to see 4.5% growth in 2019. While these metro areas will see growth, some rural areas in the state are expecting stagnant growth.
Overall, fueling the rise in property values is Florida’s healthy economy. Job growth exceeded 2.5% over the past year, and the state economy is the 17th largest economy in the world. Over 150,000 jobs are expected to be created in 2019.
Further, fueling rising property values is that Florida has always been a top destination for snowbirds and retirees. This is a trend that is unlikely to change, and with Florida being a low tax state it will likely remain a destination for those on fixed incomes.
Learn More: Florida Real Estate Market Trends
The Best Time of Year to Buy a Home in Florida
January through March are when the most homes come on the market in Florida, so it’s a good time to start looking if you want to have the most selection to choose from. If you don’t have to settle in before school starts, some of the best months to buy a home are October and November, when the least homes sell above asking price.
During the spring and summer buying season homes are on the market for a shorter amount of time as well. They tend to fall in May and reach their least amount of time on market by August. However, because Florida sees good weather throughout the year the peaks and lows in the real estate market are not as extreme.
Learn More: The Best Time to Buy in Florida
Calculate Your Property Taxes in Florida
While Florida doesn’t have an income tax, their property tax system can be quite confusing. Florida levies property taxes at the county level, which results in rates being different throughout the state.
Making the system even more complicated is state legislation that defines how homes are assessed and taxed. The state limits property values to a 3% increase per year, and exempts the first $25,000 in assessed value from all property taxes, but the next $25,000 in value is subject to all taxes. The value between $50,000 and $75,000 is then exempt from all property taxes except those related to schools.
While this is kind of confusing, it helps keep the effective tax rate down. The average effective property tax rate across the state is 1.02%, but ranges from 1.38% in Hendry County to 0.61% in Jackson County. For the average Florida home, valued at $230,000, this translates to about $2,346 in property taxes due each year.
Learn More: How to Calculate Property Taxes
How Much Are Closing Costs for Home Buyers in Florida?
Closing costs usually total 3% of the purchase price of a home, and consist of transfer taxes, escrow and title fees, agent commissions, and other fees. These costs are usually split between the buyer and the seller, but not necessarily evenly.
Transfer taxes are usually paid by buyers, but can also be negotiated. In Florida the fee is $0.70 for every $100 in assessed value, and applies to most deeds or contracts and agreements to a deed. This works out to $1,610 on the average home in Florida ($230,000).
However, Florida also charges a separate rate on mortgage filings and paperwork. This is assessed at $0.35 per $100 in assessed value. However, for most of these fees they are capped at $2,450.
The other large cost is agent commissions. Typically, they are 6% and paid to the seller’s agent, who then splits it with the buyer’s agent. These rates can be negotiated and the split often is as well.
It is important to remember that taxes, fees, disclosures, and other regulations can vary on a state, regional, and local level. It’s important to work with an experienced real estate agent who can keep you informed and everything above board throughout the process.
Learn More: Who Pays Closing Costs on a House?
Clever Will Help Pay Your Closing Costs!
Clever’s Home Buyer Rebate program can bring you additional cost savings opportunity — i.e., Clever buyers who spend $150k and above (in qualifying states) qualify for a $1k rebate to help cover their closing costs. Clever Real Estate connects buyers and sellers with top-rated, local agents from major real estate brands and brokerages (e.g., Keller Williams, Century 21, RE/MAX, etc.).
Our Partner Agents are expert, full-service agents, who’ve agreed to put money back in your hands after closing, which you can put towards your down payment, closing costs, mortgage, moving expenses, or even take as cash (pending lender approval).