A step-by-step guide to buying a house in Florida

Untold numbers of people have multiple reasons for buying a house in Florida. The Sunshine State is a magnet for anyone who loves warm weather and proximity to some of the nation’s most beautiful beaches.

Florida is a notably attractive destination for tourists and home buyers alike. Its sunny weather brings in people from colder climates and makes it a popular place to visit and retire.

If you’re trying to decide where to live, Florida might be the perfect place for you. Let’s explore some important steps to buying a home in Florida and a few buying tips to keep in mind.

Why buy a house in Florida?

No matter if you’re a snowbird or a lifelong resident, Florida real estate can be a solid investment. You may be from the area and want to put down roots by owning a home, or you may be simply looking for a sunny place to move. Either way, it’s a great time to buy a house in Florida. If you own a piece of property, its value could rise as the state increases in popularity.

In fact, a Florida home can be a solid real estate investment even if you don’t live in the state. Rental properties often have a great return on investment, and you can hire a property manager to maintain the property.

What are the top places to buy a house in Florida?

Florida has many popular coastal communities. From the Gulf of Mexico in the West to the Atlantic Ocean in the East, you’re never far from the beach.

Rocket Homes^SM has previously compiled a list of the top places to buy a house in Florida. The top five picks from that list are:

1. Belle Isle
2. Palm Beach
3. Milton
4. Lutz
5. Lake Mary

For more on each Florida location and why it ranks so highly, you can check out the article linked just above.

How to buy a house in Florida

If you’re ready to buy a home in Florida, the following steps can help guide you through your home buying journey. 

1. Get your financing in order

The first step you should take toward Florida homeownership is making sure you have a good handle on your finances. This involves figuring out how you’ll pay for the home, how much home you can afford and setting a budget accordingly. It’s also an ideal time to check your credit score so you’ll have a sense of the financing options you may qualify for.

If you decide to apply for a mortgage, you should save for a down payment. The more money you can put down upfront, the less you’ll likely fork over in closing fees, monthly payments and interest over the life of the loan.

From there, you can apply for preapproval with a mortgage lender. Getting preapproved lets you see the loan repayment term and interest rate you might receive. If you apply for preapproval with multiple lenders, you’ll be able to compare offers and choose the best one for you.

2. Find a trusted Florida real estate agent

Once you’re preapproved, you can search for and pair up with a credible real estate agent – who might also have the distinction of being a REALTOR^®. A preapproval allows you to tell your agent the mortgage loan amount you expect to be approved for. Your agent can then use this information to help you find homes within your budget.

Working with the right agent can make for a smooth home buying experience. They’ll have access to housing market data – which they can use along with your budget, goals and preferences – to help you find the best area and home for you. Looking for the right real estate agent? Work with a Rocket Homes Partner Agent.

3. Make a competitive offer

After narrowing your purchase options with the help of your agent, you can pick a house to make an offer on. Florida being a sought-after place to buy property, you might find yourself putting in an offer alongside offers from other interested buyers.

In this case, making a competitive offer can improve your chances of having your offer accepted over others. Your best bet is to make a no-contingency offer or offer a few thousand dollars above the asking price.

4. Prepare for closing and close on the house

Once a seller accepts your offer, you’re well on your way to closing on the home purchase. However, you’ll still need final loan approval, and your lender will likely require you to order a home appraisal that reveals exactly how much the house is worth. Also, you may elect to get the home professionally inspected and do a final walk-through of the house to ensure that everything is in working order.

Upon signing the necessary paperwork and paying your closing costs on closing day, you’ll receive the keys to your new home.

Tips for buying a house in Florida

If you’re ready to buy a home in Florida, use these 10 tips to make sure you do it right.

1. Know the real estate market

Timing is everything when buying a house, especially in Florida. Researching the market and home prices in the area where you’re looking to buy is important. Know whether it’s a buyer’s or a seller’s market. If certain areas are outside of your budget, look for up-and-coming neighborhoods.

Most of Florida is an attractive real estate market. Many properties are usually for sale, but there are also many interested buyers. Depending on the city and neighborhood where you wish to live, the market may be especially competitive.

2. Explore available financing options

Financing options can vary from one Florida county to another, and Florida offers resources specifically for qualifying first-time home buyers. These perks include down payment assistance, subsidized mortgage programs and favorable mortgage rates.

3. Understand Florida property taxes

Florida’s Homestead Exemption lets homeowners claim up to a $50,000 exemption on their property taxes. This applies only to primary residences, however. The state’s average effective property tax rate is 0.91%, as property taxes vary by county.

4. Factor weather into insurance plans

If you’re relocating to Florida, be sure to consider weather events such as hurricanes when contemplating options for homeowners insurance. Standard home insurance doesn’t cover flooding. This means you’ll need to take out separate flood insurance or otherwise risk devastating losses in the event of a hurricane or another natural disaster.

5. Learn the laws for oceanfront property

If you’re buying oceanfront property, get familiar with the laws concerning your land. For example, you can’t remove certain vegetation, and you may not be able to use light during turtle nesting season.

On the beach, anything below the mean high tide line belongs to the state. If you don’t want people to use this area, you may be able to restrict access to your property.

6. Ask about deed restrictions

Deed restricted communities are common in Florida. These communities have a homeowners association (HOA) that creates and enforces rules. The HOA’s job is to make sure the neighborhood stays in good shape so home values don’t decline.

Before buying, understand any restrictions and requirements you’ll need to adhere to.

7. Prepare to pay higher closing costs

Closing costs in Florida are among the highest in the country. Buyers and sellers have to pay many fees at closing. To avoid high closing costs on closing day, you could pay in cash, negotiate for the seller to pay all or some of the costs, or see if you can roll the costs into your mortgage.

8. Find out who pays for title insurance

The party responsible for paying title insurance depends on the county you purchase property in. The seller pays for title insurance in 60% of the counties in Florida. However, in counties such as Miami-Dade and Broward, the buyer pays for title insurance.

9. Know your seller

Many sellers in Florida aren’t residents. This can make transferring a title trickier than is typical. Learn about the seller and keep open communication with them throughout the home buying process.

10. Save for a big down payment

Florida is home to beautiful beaches, exotic wildlife and a lot of foreclosures. For this reason, private mortgage insurance (PMI) for conventional loans isn’t available or may be more expensive in many areas. This means that to be approved, you may need a 20% – 25% down payment on a single-family home.

The bottom line: Florida home buying mixes risk and opportunity

Florida is an attractive destination, and its population is seemingly ever growing. You can choose from a variety of vibrant cities, each with a unique culture and identity that appeals to vacationers and home buyers alike.

Whether you’re interested in purchasing an investment property or a primary residence, be sure you know what to expect when buying a new home.

Tired of dreaming of white sand beaches and ready to make a purchase? Apply for a home loan through our friends at Rocket Mortgage^®.