You've moving to South Florida, and you want to buy a house or a condo. But, as a newcomer, you're not sure where to start.
The houses look nothing like the houses where you have lived before, and you're not sure how much work it is to maintain a swimming pool. With prices as high as they are, you certainly don't want to make a mistake when buying a house in Florida.
From Homestead to Jupiter, through Miami and Fort Lauderdale and West Palm Beach and all the suburbs, where will you be happiest?
Homes are not cheap in South Florida. The median home sales price in the first quarter of 2019 in Miami-Dade was $350,000 for a single-family home and $240,000 for a condo. In Broward County, it was $355,000 for a single-family home and $165,000 for a condo. The median price in Palm Beach County was $345,000 for a single-family home and $175,000 for a condo. A nice house in a nice neighborhood is likely to cost more, perhaps much more, in Florida's hot real estate market (though it is cooling in the higher price ranges).
In some ways, buying a house in Florida is like buying a house anywhere else. You look at your budget, determine what you can afford to spend and get preapproved for a mortgage, so you look at houses in the right price range.
But other features are peculiar to South Florida. For example, you can't just call State Farm or Allstate and buy homeowners' insurance. If you're in South Florida, they probably won't sell it to you. That's partly because of hurricanes, a factor you want to consider when you are examining your potential home.
Here are eight things to know when buying a house in South Florida:
1. Homeowners insurance is expensive and it may be difficult to acquire.
Most major insurance companies will not write homeowners' insurance in South Florida. Some smaller companies will provide insurance – if the house meets their requirements. That usually means the electrical system, plumbing, air conditioning and window coverings must pass inspection. If you're buying an older home, those systems may not be up to the standards required. If the seller won't make the repairs, you may have to find another home. Citizens Property Insurance, a public-private entity, may insure your home, but the rates are higher and could exceed $5,000 a year. Some homes in South Florida also require flood insurance.
2. You won't pay the same property tax that the previous owner paid.
Florida gives a property tax break to owner-occupied homes. The homestead exemption, which you must file for after closing, exempts the first $25,000 from all taxes and an additional $25,000 from all but school taxes. While property is assessed for tax purposes at market value, there is a cap of 3% on how much your value can rise each year for tax purposes (though improvements can raise the value more). When a new owner takes over, the property is reassessed and the new owner pays at that value. Florida has no state income tax, for property taxes are a key way for municipalities to collect revenue.
3. Shop around for title insurance.
The buyer gets to choose the title company for the closing. In South Florida, that is usually a lawyer, and you can choose a lawyer who will represent you. Your real estate agent or mortgage broker may make recommendations, but it makes sense to shop around because closing costs can vary significantly among title professionals.
4. Be realistic about commuting times.
On a Sunday afternoon, it may not take long to drive from your prospective new home in the far west of the county to your office 25 miles east. During prime commuting hours, the drive could take hours. Before you make a final neighborhood choice, try your commute during the times you'll be driving to and from work.
5. Each county is a school district but all schools are not equal.
If schools are important to your family, make sure you know which schools serve the neighborhoods you're considering. You can usually check online at the school district's website. There also are charter schools, magnet schools and private schools that are not linked to where you live.
6. Many suburban neighborhoods have homeowner associations.
HOAs are especially common in South Florida's newer, family-friendly neighborhoods. That can be good (shared amenities, protection of property values) or bad (ineffective volunteer boards, intrusive rules). If you're looking at a home in an association, be sure to research the association as well as the neighborhood.
7. Consider hurricanes.
The more active hurricane seasons of recent years have made Floridians much more conscious of protecting their homes. When you're shopping, ask about impact-resistant windows, hurricane shutters (only certain types provide an insurance discount), exterior doors and garage doors. Any of those things can be updated, but hurricane-resistant windows and doors are significantly more expensive, and sometimes the openings have to be reinforced as well. You also will want to consider whether you'll need to evacuate your new home if a hurricane is predicted. Generally, the evacuation areas are near the ocean, near the intracoastal waterway and in the eastern neighborhoods.
8. Only get a pool if you plan to use it.
A swimming pool can be a wonderful thing on a hot summer day. But they do require maintenance, and you'll either need to hire a pool service or learn to do it yourself. A pool usually does not add to the value of a home, but it's expensive to add one, so you're better off buying a home with a pool already built if you decide you want one.