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Buying a Home - Florida Real Estate Places

Buying A Home

Different lifestyles demand different styles of homes, and as your real estate agent, it is our job to guide you throughout the entire home buying process, from pre-qualifying and home selection all the way through to contract negotiations and closing. The "Brokerage Fee Is Paid By The Seller", so the services of your real estate agent are FREE OF CHARGE to you as the Buyer.

TAX SITUATIONS TO CONSIDER 

MORTGAGE INTEREST DEDUCTION (FEDERAL)

  • Buyers who itemize deductions may deduct mortgage interest within IRS limits.

  • Applies to primary and secondary homes (not typically investment properties in the same way).

DOCUMENTARY STAMP TAXES

  • Florida charges documentary stamp taxes on deeds and mortgages.

  • Who pays: Sometimes negotiable, but commonly:

  • Seller pays doc stamps on the deed

  • Buyer pays doc stamps on the mortgage

  • These are one-time closing costs, not recurring taxes.

CAPITAL GAINS CONSIDERATIONS (Future Sale)

  • Primary residence exclusion: Up to:

    • $250,000 (single)

    • $500,000 (married filing jointly)

  • Must live in the home at least 2 of the last 5 years before selling.

FIRST TIME HOME BUYER BENEFITS

  • Credits and programs: Some states or local governments offer tax credits, exemptions, or grants.

  • IRA withdrawals: First-time buyers may withdraw up to $10,000 from an IRA without penalty (taxes may still apply).

FLOOD ZONES & INSURANCE IMPACT ON TAXES

  • Flood zone status does not directly affect taxes, but higher insurance costs can impact overall affordability and escrow payments.

NO STATE INCOME TAX

Florida does not have a state income tax, which makes homeownership more attractive compared to many other states.

  • However, federal tax rules still apply.

PROPERTY TAXES

  • County-based taxes: Property taxes vary by county and municipality and are based on the assessed value of the home.

  • Reassessment after purchase: Taxes often increase after the sale because the assessed value resets closer to market value.

  • Prorated at closing: Buyers usually pay their share of property taxes from the closing date forward.

FLORIDA HOMESTEAD EXEMPTION (Primary Residence)

If the home will be your primary residence, you may qualify for:

  • Up to $50,000 reduction in taxable property value

  • Save Our Homes cap: Limits annual assessment increases to 3% or CPI (whichever is lower)

  • Additional protections: Creditor protection and tax portability benefits

⚠️ You must apply for the homestead exemption—it is not

      automatic.

INVESTMENT & RENTAL PROPERTY TAX ISSUES

  • No homestead exemption for rentals or second homes

  • Rental income is taxable, but expenses and depreciation can be deducted

  • Short-term rentals: May be subject to:

    • Florida sales tax

    • Local tourist development taxes

TRANSFER & CLOSING RELATED COSTS

  • Florida does not have a traditional transfer tax, but doc stamps function similarly.

  • Title insurance and recording fees are not tax-deductible but affect total purchase cost.

CONSULTING A FLORIDA TAX REAL ESTATE PROFESSIONAL

  • Florida tax benefits can be significant, but timing, property use, and exemptions matter.

  • A CPA or knowledgeable real estate professional can help you maximize savings.

STATE & LOCAL TAX (SALT) DEDUCTION LIMIT

  • Property taxes are part of the federal $10,000 SALT deduction cap.

  • This may limit how much of your Florida property tax you can deduct on your federal return.

Home Buying Process - Florida Real Estate Places

There are different tax situations to consider when buying a first or a second home and securing a mortgage:

HOME BUYER ASSISTANCE

The purchase of your home is one of the biggest investments you will ever make, so our real estate agents will carefully assist you throughout every step of the way with the following:

  • Pre-qualifying

  • Location selection

  • Home and property selection

  • Contract negotiations

  • Mortgage application

  • Financing process

  • Various inspections performed

  • Obtaining homeowners insurance

  • Underwriting

  • Closing

Homeowners insurance is required by all mortgage lenders to protect the home from any potential damage. Insurance costs will vary depending upon the size of the home and location. 

International buyers must consider property taxes when buying a home in the United States. The taxes vary by state and county depending on the area and value of the property.

Florida Real Estate Places follows a structured process from initial financial preparation through to the final closing of your new home.

REALTOR'S STEPS IN ASSISTANCE

PREPARATION AND FINANCIAL COUNSELING

  • Mortgage Pre-approval Assistance: Realtors connect buyers with preferred lenders to secure a pre-approval letter, which is essential for making competitive offers in the Florida market.

  • Budget and Wishlist Development: Agents help buyers assess their finances, identify essential home features, and prioritize locations based on lifestyle and permanent community features.

  • Representation Disclosure: Realtors must clarify their role, typically acting as a "Transaction Broker" by default in Florida or as a "Single Agent" if a specific fiduciary relationship is requested.

HOME SEARCH AND EVALUATION

  • Accessing Exclusive Listings: Realtors provide access to the Multiple Listing Service (MLS) and identify properties that may not be visible on public consumer sites.

  • Scheduling and Accompanying Showings: They coordinate private tours and attend open houses with buyers to spot potential defects or high-value features like energy efficiency or newer construction

NEGOTIATING AND MAKING AN OFFER

  • Comparative Market Analysis (CMA): Agents analyze neighborhood data to suggest a strategic offer price.

  • Drafting the Purchase Agreement: They prepare the offer package, ensuring critical contingencies are included, such as home inspections, appraisals, and financing approval.

  • Managing Earnest Money: Once an offer is accepted, the realtor coordinates the payment of "earnest money" (a good-faith deposit) to an escrow agent or attorney.

INSPECTIONS AND DUE DILIGENCE

  • Facilitating Inspections: Realtors recommend qualified home inspectors and review reports with the buyer to identify structural or maintenance issues.

  • Post-Inspection Negotiation: If issues are found, the agent negotiates with the seller for repairs, price reductions, or closing cost credits.

  • Monitoring Deadlines: They track critical contract timelines to ensure the buyer's deposit remains protected during the inspection and appraisal periods.

FINALIZING THE TRANSACTION

  • Reviewing Closing Documents: Realtors review the final closing statement (HUD-1 or Closing Disclosure) to ensure all financial terms and disbursements are accurate.

  • Final Walkthrough: The agent accompanies the buyer on a final visit to the property to confirm its condition and ensure any agreed-upon repairs were completed.

  • Closing the Deal: They coordinate with title companies or attorneys to finalize the transfer of the deed and keys.

HOME BUYING PROCESS

Florida Real Estate Places can assist you from site selection and contract negotiations all the way through to the closing.

GET PRE-APPROVED FOR A MORTGAGE

  • Contact a lender to determine your budget.

  • You’ll receive a pre-approval letter, which strengthens your offer.

  • Cash buyers should have proof of funds ready.

WE WILL HELP YOU SEARCH FOR A HOME

  • We can tour homes in person or virtually.

  • Review HOA rules, short-term rental restrictions, flood zones, and insurance requirements.

MAKE AN OFFER ON THE HOME OF YOUR CHOICE

  • We can submit a Florida-approved purchase contract (known as a FAR/BAR).

  • Your offer will include:

    • Purchase price

    • Earnest money deposit

    • Financing terms

    • Inspection period

    • Closing date

MAKE AN EARNEST MONEY DEPOSIT

  • Typically 1–3% of the purchase price.

  • To be held by the title company or closing agent

  • This shows serious intent and is credited at closing.

HOME INSPECTION PERIOD

  • Florida contracts usually include an inspection period (often 7–15 days).

  • You may:

    • Proceed as-is

    • Negotiate repairs or credits

    • Cancel the contract if issues arise

SECURE FINANCING

  • Complete the loan application.

  • Lender orders an appraisal and underwriting begins.

  • Avoid major financial changes during this period.

TITLE SEARCH & TITLE INSURANCE

A title company conducts a title search to confirm clear ownership.

  • Title insurance protects against ownership or lien issues.

  • Florida is a “title insurance state,” and practices vary by county.

APPRAISAL

Required for financed purchases.

  • Confirms the home’s value supports the loan amount.

  • If the appraisal is low, renegotiation may be necessary.

INSURANCE & UTILITIES

  • Secure:

  • Homeowners insurance

  • Flood insurance (if required)

  • Florida insurance underwriting can take time—start early.

FINAL WALK-THROUGH

  • Conducted shortly before closing.

  • Confirms the property is in agreed-upon condition.

CLOSING DAY

  • Typically handled by a title company or attorney.

  • Buyer signs final documents and pays closing costs.

  • Deed is recorded, and you receive the keys

POST-CLOSING TASKS

  • Apply for Florida Homestead Exemption (if primary residence).

  • Set up utilities and property tax accounts.

  • Keep all closing documents for tax purposes.

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