Nearly one in five residents of Florida is an immigrant and one in eight is a U.S. citizen with an immigrant parent, reports the American Immigration Council. Moreover, the housing sector in Florida has attracted the most foreign investment, according to the National Association of Realtors (NAR). In this article, we will explain how foreigners can purchase real estate in Florida and what considerations they should keep in mind.
Content:
- Limits on property purchase by nationals of unfriendly countries
- How to buy property step by step
- Costs when buying real estate in the USA
- Real estate market in Florida in 2023
- Let us help you purchase property in the USA!
Limits on property purchase by nationals of unfriendly countries
Starting July 1, 2023, a new law (Senate Bill 264) signed by Florida's Governor and presidential hopeful Ron DeSantis restricts nationals of unfriendly countries from buying property in Florida. The law's new regulations aim to strictly control and regulate real estate purchased by foreign investors in the state. It could shape the housing market and directly impact overall investment dynamics.
According to the law,
- Foreign buyers cannot acquire agricultural land, but this rule doesn't apply to regular houses and apartments in Florida.
- Foreigners cannot buy any real estate within 32 km of airports, military bases, and critical infrastructure.
The ban applies to citizens of Cuba, Venezuela, Iran, Russia, China, North Korea, and Syria. Local real estate agents warn of potential issues under this law. It's possible that additional checks for buyers associated with these countries may occur, making the property acquisition procedure more complex. Difficulties may arise in determining which properties are prohibited since there is no official map of "critical infrastructure."
This brings uncertainties and inconsistencies to the state's real estate sector. All interested parties should consider these restrictions when buying or selling property, and transactions should involve competent lawyers and experts.
How to buy property step by step
Start by researching the market and selecting a property that suits your needs. Our real estate aggregator website features a wide range of apartments, houses, and villas in Florida for sale.
The process of buying a property involves two main steps:
- Hiring a lawyer. An expert will offer legal assistance throughout the transaction, record property rights, and handle various tasks. The attorney will also give you guidance on taxation and help you get essential documents like a tax ID number and a bank account.
- Opening a U.S. Bank Account. You need to open a bank account if you want to buy property using a mortgage. It's required for financial transactions and getting a loan.
- Applying to a Mortgage Broker (if needed). If you want to apply for a loan, it's important to work with a mortgage broker. The broker will determine how much money you are eligible to borrow and calculate your monthly payments. Typically, buyers don't need to pay for broker services. Brokers are funded by the bank instead.
- To prepare an offer, you first select the property and obtain preliminary credit approval. Then, you draft an initial agreement that outlines all transaction conditions like price, terms, and responsibilities. This document is sent to the seller for review. If both the bank and the seller approve the offer, the transaction process moves to the next stage.
Then, the parties sign a purchase and sale agreement. This document outlines all the transaction conditions, as well as the rights and obligations of each party. After the agreement is registered, the buyer becomes the rightful owner of the property.
This is the typical process, but each case may have unique aspects and additional steps. Therefore, it's important to consult with knowledgeable professionals for personalized guidance.
Costs when buying real estate in the USA
When you buy property in the USA, you'll have to pay buyer's expenses, also known as "closing costs." These costs include legal services, property insurance, and court and registry fees. If you're not taking out a mortgage, closing costs can be 1-2% of the purchase price.
The services of a real estate agent typically cost 4-6% of the property's value, and sellers usually cover this expense. The seller must also pay a transfer tax of 0.01-2% of the transaction value. If you are buying property with a mortgage, you may also have other expenses. These may include:
- Getting an independent assessment of the property, which can cost between $250 and $600.
- Opening an escrow account, which is typically around $40.
- Paying fees for mortgage processing, which are generally around 0.5% of the loan amount.
- Getting mortgage insurance (if the down payment is less than 20% of the purchase price). The cost of this insurance can range from 0.55% to 2.25% of the purchase price.
- Payment to a mortgage broker, typically between 0.5% to 2.7% of the property's value.
- Title insurance (in some cases), typically between 0.5% to 1% of the acquisition price
- Property insurance, which is usually around 1% of the property's value per year.
In some cases, insurance is mandatory if you have a mortgage, and the service cost ranges from 1% to 5% annually of the property's value depending on factors like flood risk. The price of legal services is typically between $1,000 and $1,500.
Real estate market in Florida in 2023
Demand for real estate in the state has been very strong in recent years. In the first half of November 2023, the average price of a single-family home in Florida was $409,000, a 1% increase from the same period last year when it was $404,000. Regarding condos and townhouses, they currently have an average price of $325,000. This is a 6% increase from the previous period, where the price was $307,000. Sales of single-family homes in September rose by 14.1% from 2022, totaling an impressive $12.2 billion. This substantial increase shows that Florida remains an appealing location for buyers.
Let us help you purchase property in the USA!
Find your ideal property by checking out the trusted developers and agencies in our catalog. Use filters to sort options by area, amenities, location, property type, and more. The real estate sector in the Sunshine State is ripe for investment. Begin your search for a new apartment or home in the USA today!