By Grant Edrington – Updated August 8th, 2023
Considering buying a home in Florida? The Sunshine State offers an incredible lifestyle with its beautiful beaches, warm weather, and vibrant communities. In this article, we’ll explore what you can expect when buying a home there, including important factors like the housing market, cost of living, and popular areas to consider. So, let’s dive in and discover all you need to know about making Florida your new home sweet home. Here are some of the considerations we’ll cover:
- How to Decide Where to Live in Florida
- What to Know About Buying a Home in Florida
- How To Buy a House in Florida: 8 Tips
- Rent-to-Own a Home in Florida with Divvy
- FAQs About Buying a House in Florida
How to Decide Where to Live in Florida
Choosing the right place to live in Florida can be an exciting, yet challenging decision. Several factors come into play when determining the ideal location that suits your lifestyle and preferences. Florida offers a diverse range of options, including bustling metropolitan areas like Miami and Orlando, known for their vibrant nightlife and cultural attractions. If you prefer a more tranquil locale, consider serene coastal towns like Naples and Destin – famous for their pristine beaches and laid-back atmosphere. Ultimately, finding the perfect place to call home in Florida will depend on your personal preferences and priorities.6
Personal Preference
When deciding where to live in Florida, personal preference plays a crucial role. Are you drawn to the excitement of big cities, do you prefer the homey feel of smaller communities, or does the idea of living in a vibrant college town or a lively retirement community better suit your needs? You can find it all in Florida.
Explore North Florida and you’ll discover Southern culture and plenty of natural beauty. Check out Central Florida and you’ll find some of the state’s most popular vacation destinations. And in South Florida, you’ll find a tropical, laid-back vibe with a lively Latin influence. 6
Each location in Florida has its own unique charm, so take the time to investigate various cities and neighborhoods within those areas to find the place that best feels most like home to you.
Cost of Living
Another important factor to consider when choosing where to live in Florida is the cost of living. While Florida, in general, has a lower cost of living compared to many other states, there can be significant variations depending on the city or town. For example, Miami and West Palm Beach tend to have higher living costs due to their popularity and desirable amenities, while smaller inland communities might offer more affordable housing options. Take into account factors like housing prices, property taxes, utilities, and overall expenses to ensure your chosen location aligns with your budget and financial goals.1,2,3
Home Prices Throughout Florida
Considering home prices is a crucial aspect when deciding where to live in Florida. As of Q1 2023, the median home price in Florida was $399,000, according to Florida REALTORS® However, home prices can vary significantly depending on the location within the state. For example, metropolitan areas like Miami and Fort Lauderdale generally have higher home prices compared to smaller towns or rural areas. Keep your budget in mind when exploring different regions in Florida to ensure you find an area with affordable housing.5
What to Know About Buying a Home in Florida
There are several factors you should be aware of when looking for a home in Florida.1,3,4,7
You Will Need to Pay Property Taxes
While Florida doesn’t have state income taxes, homeowners in the state are subject to annual property taxes. On average, Florida homeowners pay 0.86% of the property’s value in property taxes. The average property tax rate across the US is 1.10%, placing Florida’s property tax rate slightly lower than average. Request the previous year’s property tax bill from the seller to get an idea of what you can expect to pay once you own the home. 4, 10
Closing Costs Are in Addition to Your Down Payment
In addition to your down payment, be prepared to cover various closing costs when purchasing a home in Florida. On average, homebuyers in the state face between 2.3% to 3% of the purchase price in closing costs – among the highest in the US, and compared to the national average of 1.03% These costs can include fees for appraisals, inspections, title insurance, and attorney services, among others.1, 11, 12
There Are Differences in Florida Real Estate Law
When choosing a real estate agent to help with the home purchase process, you may find the experience different from other states. In Florida, an agent can be a single agency who represents either the buyer or the seller, but not both. Or, the agent can be a transaction broker who works for the transaction of the property but does not represent or advocate for the seller or the buyer.8
Climate and Weather Must Be Considered
Florida’s climate brings the potential for hurricanes and storms, making it important to factor in insurance and maintenance costs to protect your home. Some insurance companies have even stopped issuing new homeowners insurance policies in the state due to the potential for high costs from hurricane and storm damage. Additionally, rising sea levels pose a higher risk of flooding in certain coastal areas. It’s essential to assess insurance needs and potential risks before committing to a property in Florida.
Homeowners Associations (HOAs) Are Common
Many residential communities in Florida have homeowners associations that enforce rules and collect fees to maintain shared amenities and common areas. Before purchasing a home, familiarize yourself with the HOA rules and regulations, including any associated fees, restrictions on property use, and potential conflicts with personal preferences. Be sure to factor these costs into your budget while you’re house-hunting, as HOA fees additional monthly expenses on top of your mortgage and any restrictions may limit what you can do with your yard or home’s facade.
You Could Receive a Homestead Exemption
Florida offers a homestead exemption, providing property tax relief for full-time residents who make their primary residence in the state. As properties are taxed based on periodic assessments and home values increasing over time (either due to upgrades or desirability of a given location), a homestead exemption lowers the taxable value of a home – and in turn, can result in significant savings on property taxes. Check the eligibility criteria and application process to take advantage of this benefit once you become a Florida homeowner. 7
How To Buy a House in Florida: 8 Tips
Ready to start your Florida homebuying journey? We’ll guide you through the key steps and considerations involved in the process, ensuring a smoother and more informed experience. If you are a first-time homebuyer interested in buying a home in Florida, our guide to first-time homebuyer programs will help you understand about qualifying. 1, 3
1. Know the Florida Real Estate Market
Familiarize yourself with the Florida real estate market by researching current trends, property values, and neighborhood dynamics. This knowledge will help you make informed decisions throughout the homebuying process.
2. Know What You Can Afford
Assess your financial situation and determine a realistic budget for purchasing a home in Florida. Consider factors like your income, existing debts, and expenses to understand how much money you will have available to spend on a monthly mortgage payment. It’s also wise to keep an eye on current mortgage rates, as those can impact your monthly payment and overall home affordability.
3. Get Preapproved
Before starting your home search, obtain mortgage preapproval from a lender. This is an offer from your lender qualifying you for a specific mortgage amount. You’ll have a clear idea of your borrowing capacity, making you a more competitive buyer in the market. Going to real estate agents with a preapproval letter or note can also speed up the timeline of them working with you to find a home.
4. Find a Real Estate Agent
Collaborate with a reputable real estate agent who is knowledgeable about various Florida markets where you’re interested in buying a home. Their expertise and local knowledge will guide you through the process, from finding suitable properties to negotiating the best deal.
5. Save for Your Down Payment
Set aside funds for your down payment, which is typically a percentage of the home’s purchase price. Saving diligently will help you meet the minimum requirements and potentially secure better mortgage terms.
6. Save for Closing Costs and Moving
In addition to the down payment, budget for closing costs, which can include fees for appraisals, inspections, title insurance, and more. Also, factor in moving expenses to ensure a smooth transition to your new home.
7. Consider Florida Weather Patterns When Purchasing Home Insurance
Given Florida’s climate and the state’s potential for hurricanes, it’s crucial to obtain adequate home insurance coverage. Research insurance coverage options and costs necessary to protect your home from the weather-related risks associated with your chosen area. Mortgage lenders and real estate agents in Florida may be able to point you in the right direction for insurance, too.
8. Prepare to Make a Competitive Offer
Once you’ve found the home you want, it’s time to make a competitive offer.
Your local real estate agent can help you better navigate this process and help you to make a strategic offer. For instance, if you make an offer that’s too low, you might miss out on a house you really want. On the other hand, you don’t want to overpay by offering too much. An expert agent knows how to help you make an offer that’s just right, so you get the best deal possible within a budget that works for you.
Rent-to-Own a Home in Florida with Divvy
If you aren’t ready to tackle all the steps necessary to buy a house in Florida just yet, Divvy has you covered. You can choose almost any home on the market within your approved budget, rent it, and choose to contribute part of your monthly payment toward a down payment over time. Divvy’s rent-to-own program is available in several Florida metro areas and is aimed at helping renters make a smooth transition into homeownership.
Browse rent-to-own homes in Florida:
Want to learn more about Divvy? Find out how it works and apply to see if you qualify.
FAQs About Buying a House in Florida
Is it a good idea to buy a house in Florida?
Buying a house in Florida can be a good idea for many people. South, and North Florida areas feature a desirable climate, access to a variety of recreational activities, and numerous affordable housing options. However, it’s important to consider factors like property taxes, insurance costs, and the local real estate market before making a decision.
How much money do you need to buy a house in Florida?
The amount of money you need to buy a house in Florida varies depending on several factors, including the location, type of property, and your personal financial situation. For reference, the median price of a home in Florida is $399,000 as of March 2023. Generally, you’ll need to budget for a down payment, closing costs, and potential reserves for emergencies or future expenses. It’s advisable to consult with a mortgage lender to determine your specific financial requirements.5
In some instances, you can potentially buy a home with no money down or a lower down payment, if you qualify for several government-backed programs.
What is a good credit score to buy a house in Florida?
The exact credit score requirements to qualify for a mortgage and secure the best rate can vary among lenders and loan programs. In order to qualify for an FHA loan, you must have a minimum score of 500.9 To qualify for a lower 3.5% down payment on an FHA loan, you must have a credit score of at least 580. However, a higher credit score generally improves your chances of qualifying for a mortgage and securing favorable interest rates. It’s recommended to review your credit report, address any issues, and work towards improving your credit score before applying for a mortgage.
What are the best places to live in Florida?
The best places to live in Florida largely depend on personal preferences and priorities. Some popular locations include Miami for its vibrant city life, Orlando for its world-famous theme parks, Sarasota for its cultural scene, and Naples for its beautiful beaches. Other notable areas include Tampa, St. Petersburg, Jacksonville, and Fort Lauderdale. Consider factors like employment opportunities, cost of living, amenities, and lifestyle when determining the best place for you.1, 6
Sources:
1 https://www.ramseysolutions.com/real-estate/buying-a-house-in-florida
2 https://livingcost.org/cost/united-states/fl
3 https://www.ramseysolutions.com/real-estate/cost-of-living-in-florida
4 https://www.ezhomesearch.com/blog/a-guide-to-florida-property-taxes/
5 https://www.floridarealtors.org/tools-research/reports/florida-market-reports (Single Family Homes 2023 Q1 Detail)
6 https://realestate.usnews.com/places/rankings/best-places-to-live-in-florida
7 https://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx
9 https://www.fha.com/fha_article?id=200
10 https://www.businessinsider.com/personal-finance/average-property-taxes-every-us-state
11 https://www.upnest.com/1/post/closing-costs-florida
Grant is a member of the marketing team and focuses on connecting aspiring homeowners in our metros with Divvy. He's worked on marketing teams spanning all parts of the homeownership journey, including home loans, power tools and home improvement, siding and flooring, and now Divvy. Grant graduated from Villanova University and became a homeowner in 2021.