How exciting that you’ve made the decision to go ahead – just making that decision is important. Let’s walk through some of the steps you’ll need to take for buying your new Southwest Florida Real Estate.
Buying a home in Southwest Florida, whether a family residence, a second or vacation home, or a retirement haven is thrilling, it also takes common sense. It’s easy at times to feel overwhelmed by the process so selecting a professional with knowledge about the area, its schools, employment centers, and activities can make all the difference in the world. Since Southwest Florida Real Estate (Lee & Collier Counties) including the cities of Cape Coral, Fort Myers, Estero, Bonita Springs, Naples & Marco Island are very unique – our team has put together this guide to help you make the most of your decision, and navigate the market most easily.
The Most Important Things to Consider
Do I Need to Get Pre Approved?
Before you shop for a home, unless you’re paying cash, mortgage pre-approval is your #1 home buying preparation tool.
- Pre-approval tells you what price range you can afford
- Realtors and sellers won’t take you seriously without it
- Your mortgage process will be smoother and faster
Those advantages should be enough to convince you. But 42 percent of homebuyers go shopping for a home without mortgage pre-approval.
Searching for SWFL Homes for Sale
We have access to every major SWFL MLS (multiple listing service) allowing us to search our databases to find exactly what you are looking for. We won’t waste your time running from home to home, or neighborhood to neighborhood, this is where the real expertise comes in. You want to know before you schedule appointments what a community or neighborhood offers and not waste your time on properties you know you would never consider, much less buy. Let us help you get the information you need before you start looking. What looks good online may in fact be in a neighborhood where you can’t have your boat, truck or pet. Yes, deed restricted neighborhoods can be that particular. We will answer all your questions about living in Southwest Florida – and probably many you have not yet thought of.
Making the Offer to Purchase
Once you’ve found the home you truly would like to buy, we’ll make sure you get the best possible price for that home by providing you with the current market data that supports its true value. We help buyers negotiate contracts every day and those contracts are comprehensive and will protect your interests. Therefore, we can help you avoid costly mistakes. On the purchase of a home – nothing should be left to “chance” and experience counts in contract negotiations. Keep in mind that nearly everything is negotiable in a real estate contract and we’ll make sure we point those “negotiating” points out to you in advance.
After Your Purchase Offer is Accepted
Once your contract is accepted, the clock starts ticking. And, what needs to happen is making sure you comply with the “effective dates” and “timelines” contained within your purchase contract. That means we’ll help you with the vendor selection for home and termite inspections, the best way to handle repairs the property may need, set up your escrow instructions with the title or attorney’s firm, follow through on obtaining necessary documentation for your loan process, introduce you to insurance agents, and guide you to the closing table as smoothly as possible.
The Closing Table
Just prior to closing, we will be in touch with the title agent or attorney to ensure all pertinent documents and invoices are delivered to the closing table. We’ll review and revise the closing statement to make sure it’s accurate and complete before we go to the closing. Once at the closing table – we’ll walk you through the myriad of documents – and why they are needed – to consummate your new home or condominium purchase.
After you have the keys to your new home you may think – hooray – it’s done! Our experience tells us you may very well have some more questions or require some additional information, such as how to homestead your property. We’re here to help and it doesn’t stop the day you open the front door to your new home – you’ll still be learning about living in Southwest Florida and we are available at any time to assist you in making this transition smoothly and with as few headaches as possible. Our service does not stop at closing, because we strive to make lifelong clients.
Must Knows Before Buying SW Florida Real Estate
Florida is a High Closing Cost State
Most buyers don’t realize that Florida is classified as a “High Closing Cost” state. Florida ranks 16 out of 50 states for the average closing costs before taxes. A good rule of thumb is to budget 4 to 5% of the purchase price on closing costs, if you plan on getting a mortgage.
It is important to have someone represent you in the buying process so some of these fees are negotiated in the contract. If you don’t work with a buyer’s agent, you may sign a purchase contract and have no idea just how expensive it is to close on your new property, especially with builders and developers, or by working with a listing agent who represents the seller’s interest, not yours. That’s why it’s so important that you have your own representation when purchasing any SW Florida real estate.
Purchasing New Construction
New Home Construction Costs
Usually, the builder/developer expects you to pay the documentary stamp taxes, the owner’s policy of title insurance, a pre-set amount into the community’s “cap” fund, and perhaps a 1.50% fee for “his” costs. On a $300,000 purchase, these fees can easily amount to $10,000+ in additional closing costs, that are actually mostly negotiable. Knowing how to negotiate the best and fairest deal possible is the expertise the Realtors® of Southwest Florida REGroup will assist you with when you decide to purchase. And, remember – builders and developers “cooperate” with agents…they expect you to come in with one and are grateful when you don’t.
Deed Restricted Communities
Purchasing a SWFL home in a deed restricted community may seem very confusing at first. Many homes and condos in Southwest Florida are in planned developments, both gated and non-gated. These types of communities are governed by homeowners associations where the residents are required to comply with the recorded documents for how the property may be used. This is especially important when considering whether you may rent a second home, keep a beloved pet, or the number of guests you may have at any one time in your home, to name just a few. The term for this type of community is “deed restricted.” The documents require that you comply with the rules and regulations of the community and pay some amount of fees for the upkeep and maintenance of the common elements of the community.
In Florida, if you buy a new construction condominium, you have fifteen (15) days to review the documents and decide if you wish to proceed. If it’s an existing condominium, then you only have three (3) days to decide. Both of these time periods are from when you actually “receive a copy of the documents to review.”
What is a CDD?
CDD stands for Community Development District, which finances and manages community developments. Tax-Free Bonds are issued to the developer to finance the cost of building the infrastructure of a development, including roads, utilities, and amenities including, pools, clubhouses, tennis courts, and golf courses. The CDD fees appear on the property tax bill. CDD fees are common. If a development does not have a CDD fee, the homeowners are still paying the fees, but through some other means, such as a higher price for the land or other developer charge. This is usually for a 30 year period and even though it is part of the tax bill, it is not tax deductible. This fee is in addition to the HOA fees.
Can I rent my house while I’m not using it?
Yes, as long as it is allowed and approved by the HOA. It is important to note that: Any renter who resides for 6 months or less. It is the owners responsibility to collect the 5% Tourist Tax and submit it to the Collier County Tax Collector.
Is the 5% Tourist Development Tax the only tax due on short-term rentals?
No, there is also a 7% State Sales Use tax, payable to the Department of Revenue, for the State of Florida. You can call them at (239) 348-7565 or 1-866-693-6748 for details.
What is a Homestead Exemption and will I Qualify?
When someone owns property and makes it his or her permanent residence or the permanent residence of his or her dependent, the property owner may be eligible to receive a homestead exemption that would decrease the property’s taxable value by as much as $50,000. This exemption qualifies the home for the Save Our Homes assessment limitation. While the exemption is non transferable, a homeowner may be able to transfer or “port” all or part of the assessment difference to a new Florida homestead.
What is Flood Insurance and is it required?
If you’re a homeowner in Florida, flood insurance may be a requirement of your mortgage loan if your house is located in a moderate or high risk flood zone. Flood insurance is also a good consideration even if it’s not required due to Florida’s low elevation and high exposure to storms. Homeowners and renters insurance policies don’t cover floods or even surges, but you can purchase a flood policy through the National Flood Insurance Program (NFIP) or a private insurer. The average cost of a flood insurance policy through the NFIP is $545 per year, but you may be able to find lower rates and greater coverage flexibility by going through a private flood insurance company. Flood insurance is not required by the mortgage company for homes that are located in flood zone X.
These are just “some” of the issues you should be aware of before you decide to buy a SWFL home. With Southwest Florida REGroup acting on your behalf as your trusted representative, you’ll have someone on your side to guide you through the process. And, we’ll be representing you – not the Seller or the Builder! We can assure you’ll avoid those pitfalls you may negotiate when you write the purchase contract – as opposed to trying to change it after it’s already signed.