Perhaps the most difficult and stressful circumstance for first-timers is learning the process of buying a house. You have the option of doing it only once or multiple times during your life. However, there are a lot of critical choices to be made when buying a home in Florida.
However, being aware of the procedures for purchasing a house in Florida will help to increase your confidence and protect you from shady sellers. From determining your finances to closing on the property, the process of buying a home in Florida may be broadly broken down into 8 major steps. We will walk you through every step of the house-buying process in our in-depth guide to purchasing a home in Florida.
8 Simple Steps to Buying a Home in Florida
Recently, we surveyed a few homeowners about sharing their home purchase experience in the U.S. There was a particular owner who bought a decent home in Wellington, Florida. From his words, we came to know -
- Since 2021, the typical fixed mortgage rate in Florida has risen exponentially from historically low rates to 5.49%. Therefore, the average mortgage payment will now be $1,847 per month.
Still, there are chances of buying a home in Florida even if you are a new homebuyer. You may learn how to confidently buy a home in Florida with these 8 simple steps, regardless of what the real estate market throws at you.
Step 1: Set Your Financial Goals
It should go without saying that before purchasing a property in Florida, you must have a clear understanding of your finances and budget. In general, you should consider the following financial facts before buying a home in Florida -
- Credit score: Most likely, you need to have a minimum credit score of 620 to get approval for a traditional mortgage loan. Certainly, a higher score is preferable.
- Down payment: You can contribute 0% or 3.5% respectively based on the cost of your house when taking a loan from the government like an FHA or VA. Down payments for traditional loans can be as minimal as 3% to 5%.
Minimum down payment (%)
Down payment ($)
Source: Zillow Home Value Index
- Closing costs: In Florida, closing fees for buyers may wind up accounting from 2% to 5% of the overall expenditures. Therefore, approximately $4000 to $10,000 might be spent on a $200,000 house.
- Additional costs: Services and maintenance have extra fees. In essence, you may calculate that they amount to around 1% of the home's entire annual value.
You can obtain a range of property values once you have calculated all of these statistics. This will also stop you from searching for expensive houses or wasting time on them.
Step 2: Get a Mortgage Pre-Approval
Obtaining a mortgage pre-approval is essential to purchasing a property in Florida since many sellers won't bother to show you a home without one. Before letting you view their property, the majority of the property sellers in Florida will ask for pre-approval.
Typically, a letter of mortgage pre-approval lasts for 90 days.
It basically means that the bank is prepared to move forward with getting you a mortgage once you have chosen a home. So, you better be ready.
Here are a few things to consider while getting a mortgage pre-approval -
- Rate of interest: A lower interest rate is often preferable because it may help you save a lot of money over time.
- Down payment: Although some loans need substantial down payments, others just need 5%.
- Conditions: Most mortgages have lengths of between 15 and 30 years. Longer mortgages require more time to repay.
Quick Facts -
Following receipt of your pre-approval notice, there are a few simple steps you may take to prevent your credit from changing:
Step 3: Choose a Great Neighborhood in Florida
The next step is choosing the precise location of your new house in Florida. First of all, you need to choose the Florida municipality where you wish to live. Second, you may focus on finding a property in a particular area.
You should always consider the following facts for choosing a neighborhood in Florida -
- The current value of the place and its estimation in the future.
- The lifestyle must suit you.
- The neighbors should be welcoming, not annoying.
- The available preventative measures against crimes.
Observe historical trends in housing prices as well. This can help you estimate how much your home's worth could rise in the coming years. Investing in a house in a desirable area will increase your profits and increase the value of your property.
Step 4: Find a Skilled Real Estate Agent in Florida
Although it is possible to purchase a property in Florida alone, it is advisable to deal with a real estate agent who can act as your advocate. In particular, search for real estate agents with expertise in the housing market of your preferred community. In essence, your realtor will ensure that you obtain an excellent offer.
Take your time selecting an agent. In fact, invest the time in researching and speaking with a number of real estate brokers that specialize in the field you are interested in. You should pay attention to the following qualities of a realtor -
- The total years of expertise
- Amount of transactions over the previous year
- Skills in finding houses within your range
- Overall evaluation score
- Individual critiques and complaints
Step 5: Look for Suitable Houses in Florida
This will probably take the longest amount of time in the whole Florida home purchasing procedure. No matter what you do, take your time. Till you locate the ideal residence for you, see as many properties as you require.
The number of possibilities you have for searching for a home in Florida might be significantly impacted by the timing of the search. For instance, March typically records the highest amount of sales in property in Florida. Then, you may have more choices if you look for a property. On the contrary, December offers the fewest options in Florida. In comparison to the peak season, there are historically 23.9% fewer properties for sale in Florida.
Perhaps, the following table will give an idea about the house listing in Florida
Number of listing/month
Step 6: Submit Your Offer
The next step is to submit an offer once your dream home in Florida is located. Your realtor should work with you to develop a strategy that will have the best chance of convincing the seller to accept your offer.
You should take the following things into account while submitting your offer -
- Since sellers typically sell their properties rapidly, it is always crucial to act immediately. Make your bid as soon as possible. Properties in Florida currently stay on the list for 75 days until a contract is signed. Although every market experiences seasonal variations, houses degenerate more quickly in the busiest months.
- When attempting to persuade a homeowner to sell the house to you, don't always offer the highest bid. In order to make things simpler for the seller and improve the appeal of your bid, you may occasionally choose to pay items like closing expenses.
Step 7: Make Audits and Appraisals
To ensure everything is okay, you should examine and assess the property. If an unforeseen circumstance arises after you complete this stage, there can be a possibility to renegotiate the contract details.
Before spending a lot of money to purchase a Florida house, you may have satisfaction regarding the property's condition by having a qualified inspector evaluate it. Before purchasing a home in Florida, the following inspections should be taken into account -
- Radon testing
- Termite and insect inspection
- Electrical system
- Septic system
- HVAC system
Appraisals define the estate's worth. While using a mortgage, the lender will request an appraisal to ensure that the new home is suitable for the funds loaned to you.
Step 8: Closing Agreements for a New Home
To close on a Florida house, you must complete two main chores. First, you must read and sign the documents that will change the title to your name. Second, you must settle your closing fees in order to qualify as a legal owner.
Before signing any documents, you might want to review them all over to ensure that you comprehend them completely. Here are some documents that you may have to see -
- The disclosure
- The mortgage note
- The security instrument
- The deed
You will pay the closing charges to the title firm after finishing the papers. The money will be distributed to every service provider by the title firm.
What You Should Avoid Doing While You Are Awaiting Your Closure
Be aware of the following behaviors you must avoid at all costs when purchasing a house -
- Keep your credit report untouched.
- Don't open a new credit account.
- Keep all credit accounts open.
- Never make a purchase using a credit card.
- Avoid raising your credit limit.
Overall, if you concentrate on what you actually need, purchasing a new house in Florida is not that difficult. The methods in this article might act as a general house purchasing manual and provide insights into the procedure. You may need to ask knowledgeable, experienced specialists for assistance if necessary.