If you are looking to buy property in South Florida, we encourage you to read these crucial tips on ways to buy at the best possible price.
Out-of-state buyers have been flocking to the South Florida market for years, attracted by the climate, favorable tax environment, and the trend of working remotely, which means that the Florida housing market is as hot as it’s ever been.
With property values going up, it is vital to know what to look for before buying a house in South Florida. Particularly when getting the best bang for your buck.
Here is some vital information and tips to help ensure that you get the best price on properties for sale in South Florida.
1. Homeownership in South Florida is a sound investment
Equity is on the rise, and you can feel it. The real estate market in South Florida is one of the most lucrative investment markets out there. Many factors suggest that Florida property investments can be a rewarding venture. The state provides a great return on investment for property owners. You will see a return on your investment, even though you might spend more on the property initially.
There are currently many properties to choose from in Miami, Orlando, and the Gulf Coast. Investing in a home in South Florida will ensure that your property aligns with your investment goals and that you have rental income.
2. Home Prices Are Appreciating
Many leading experts predict that home prices will continue to appreciate this year. The benefit here is that this is just another factor that can increase your equity when home values rise.
Real estate typically appreciates between 3% and 5.5% per annum without the need for you to do much other than maintain it. Renovations and repairs can help increase property appreciation.
Your return on investment might not be dollar-for-dollar, but some renovations can pay you back as much as 80% – 90% of the money invested.
If you want to make the most of your investment, you need to consult with a licensed real estate agent or appraiser to determine which renovations will be most beneficial.
3. Buying Is More Affordable Than Renting
This trend of low mortgage rates has made the typical monthly payment (including principal and interest) less expensive for buyers. According to Odeta Kushi, Deputy Chief Economist for First American, the low mortgage rates and income growth spurred an 18.9 percent increase in homebuying power compared to a year ago.
Buying a home now versus renting one may be a game-changer as it amplifies long-term savings for homeowners. When paying a mortgage, as opposed to paying rent, that money is reinvested back in your favor, so you’re contributing to your net worth when you own a home. Equity is one of the most important financial benefits of homeownership.
4. Mortgage Rates Are Still Low
The best news for homeowners is the fact that mortgage rates are at or near their historical lows.
In 2020, mortgage rates hit all-time lows 16 times, falling below 3% for the first time in a while. Continued low rates in the early part of this year are setting buyers up for significant long-term gains. According to Freddie Mac, optimism continues as the economy slowly regains its footing, thus affecting mortgage rates.
Though rates continue to rise, they remain near historic lows. It is less expensive to borrow money for a home loan today while rates are low. This is a huge opportunity for buyers to capitalize on right now.
5. Understand Your Finances
Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. Only 44% of prospective homebuyers plan to apply for pre-approval, so be sure to take this step to stand out from the crowd. It shows sellers that you are a serious, qualified buyer and can give you a competitive edge if you enter a bidding war.
6. Make a Fair Offer
Every home buyer’s goal is to land the best deal on a new property. However, Freddie Mac also warns that submitting an offer that is too low can lead sellers to doubt how serious you are as a buyer. We suggest submitting a fair offer to give yourself a better chance at getting it accepted.
The expertise your agent brings to this part of the process will help you stay competitive. Your agent will work with you to make an informed offer based on the market value, the condition of the home, and recent home sale prices in the area.
7. Listen to Your Real Estate Advisor
We not only suggest hiring a Real Estate agent, but also advise you to pay attention and adhere to their advice. This can save you thousands of dollars in the long run!
An article from Freddie Mac offers guidance on making an offer on a home today. Right off the bat, it points out how emotional this can be for buyers and why your trusted agent can help you stay focused on the most important things, remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.
Your real estate professional should be your primary source for answers to the questions you have when you are ready to make an offer.