What does the vote to divorce the European Union mean for Florida’s residential home market?
We do not have a crystal ball. Therefore, we can not predict what the future holds. Sorry for that. But we can try to narrow it in. So, the main question is: What are the implications of this step?
The fact is that in the period from April 2014 through March 2015, U.K. home buyers made 29% of their purchases of U.S. Residential homes in the Sunshine State. This statistic was recently published by the National Association of Realtors. It makes it very clear that Florida is on top of the priority list of British home buyers.
Is everybody Up in arms?
We don’t think so, however, the decision to exit the European Union comes apparently with some uncertainties. The Pound Sterling lost already quite a bit of the value, and nobody knows how and where it levels out. Another uncertainty is the market itself. Will major companies leave the island and move their businesses to the continent or somewhere else? The consequences would be devastating for certain areas. An increasing jobless rate, less tax revenue and less income for the left behind small businesses and service providers may be the consequence.
All this is not new. In the past, it has already happened in England, Germany, the USA and everywhere else. It happened when the coal or steel industry went bust, or when a shipyard closed down and left that town in shambles. The latter happened to the town where I was born and raised. It was not a beautiful sight.
In Search for a Safe Heaven
Let’s hope that the Brexit will not have such a negative impact and things will get normal very soon. But nevertheless, there will be a certain number of people in the U.K. who are not so convinced about the happy ending. So far it is not the fear that is forcing them to do something. As bad as it is there is, fortunately, no drama involved at this point. But in search for safer havens for their capital they may stumble upon the Sunshine State again.
We do not see a tremendous amount of people liquidating their assets in the U.K. right now, but some will and they will be placing them in the U.S., particular in South Florida.
Investing in Florida
Thanks to the area’s supply of luxury real estate at prices that are much lower than in other national and international cities, the market is “hot” for investors. Miami, for example, offers much more bang for the buck compared to the other main cities in the U.S. $1 million buys approximately 830 square feet in Miami compared to 700 square feet in Los Angeles and 300 square feet in New York.
But not only the high-end market is attracting buyers from the U.K. because there are many opportunities in Florida where not so solvent purchasers can get a deal, too.
Is the Home Market in Florida going to be too expensive?
Only one important question will remain: Does the pound’s drop in value mean that U.S. home prices are too steep for all but the wealthiest U.K. Residents? Only time will tell if that is going to happen. However, if you have assets which are slowly but surely going down the drain, what are your options?
What do you get for your investment in Florida? Besides a wide choice of properties to buy from, you get 300 sunshine days a year and a wealth of natural beauty.
How does the Buying Process Work?
It is true, compared to other states, the State of Florida makes it relatively easy to buy property. There are very few restrictions for foreign nationals. However, British buyers should be aware, that despite many similarities between both countries, there are still some pitfalls and differences when it comes to the buying process.
Prepare to be surprised when you find out how they do real estate in Florida. You will be dealing with a bus-load of people while doing the transaction. All the different agents and brokers have a very particular role in the play. Seller’s agent, buyer’s agent, title agent, property inspector, termite inspector, appraiser, and so forth, they are all responsible for their part. They all take you baby- step by baby -step through the process. All steps need to be done in the right order and on time. If you do not care for the timelines mentioned in the contract – you are out of luck and may jeopardize your deposit. So be careful, be smart and listen.
You are not saving Money
Many buyers think they should avoid hiring a buyer’s agent because they could save money. Well, on the first glance it seems to be a good idea, but think twice. First of all, the seller is always paying the commission – not the buyer. Therefore, if you hire your buyer’s agent, he would be paid out of the commission the seller pays his agent anyway.
If there is another agent (buyers agent) involved, he has to split his commission. If he is representing the seller and you, the purchaser, he can keep the whole amount. You won’t get anything. So, there is no saving.
Second, the seller’s agent is only loyal to his “boss,” the Seller. He may not lie to you or distort any known facts, but it is not his duty to give you any useful guidance concerning the value for money or market value. The listing agent has only a contract with the seller, not with you, the buyer. How is that? That is not in your favor!
So, why don’t you want to hire a knowledgeable buyer’s agent for free; somebody who works for You and protects Your assets and knows the rules of the game?
What does the abbreviation “MLS” mean?
There is another big difference that is often the first surprise for British buyers: it is the business of finding properties you want to see. You do not have to trudge around hundreds of real estate agents. All you need is only one Realtor® with membership to the MLS. The MLS (Multiple Listing System) is a central database, and virtually every listed home for sale or rent is on the MLS. Pictures, virtual tours, descriptions, dimensions, tax history, ownership history, sales terms, map view, and aerial are all on the Multiple Listing System. You can use the MLS on our website, although, we cannot grant you access to details like tax or sales records. You need to be a licensed Realtor® to get that information from the system – or you can get it from us. We are licensed.
How do we help You?
We can pre-screen properties and send all the information to you before you book your flight. While flying to Florida you know already what to expect, and you won’t waste too much of your precious time. Nothing can be more annoying than looking at properties that do not even interest you.
Buying in Florida is a simple and straightforward process. If you have the right people to guide you through this process, there won’t be any obstacles in your way. Nothing is complicated – it is only different.
Location is the Key to Real Estate Success in Florida
Let us finish with one final remark: There is something that is always the same, no matter where on this Blue Planet you are buying property. The three most important factors are 1. Location – 2. Location – 3. Location. Too many visitors get blinded by Florida’s beauty. The green water, the dark blue sky, the swaying palm trees and the ever shining sun make you think that it doesn’t matter where you buy your piece of paradise. It’s beautiful everywhere, isn’t it?
This perception may be true or not true but in most cases picking a wrong location is going to haunt you later. You might be very pleased with the choice of your location yourself. But when you want to sell the house a few years down the road it may become a different twist. The potential buyers will for sure look through a different set of eyes.
Do I need to care about Schools?
At some point you may come to the conclusion that schools, shops, restaurants, airports and other amenities are equally important. But why should you think about schools when your kids are out of school age?
If you ever want to sell your home, it might have a significant impact on the resale value. You may have to deal with a very limited target group later because families won’t buy it because they want to be close to schools and shopping.
And don’t forget about the distance to the beach. If you are thinking about renting the place seasonally to recoup some of your expenses, you need to be as close to the beach as possible. Renters, especially when they are from Europe, are very demanding. They always want to be close to the beach. They also like biking paths, tennis courts, fitness studios and gated communities. That’s all they need. Easy? Easy! Oh, and don’t forget unlimited cable, a heated pool and free cold beer in the refrigerator. Yes, that was easy.
If you are seriously thinking about buying a home in the Venice/Sarasota area, don’t hesitate to contact us below. We’d love to hear from you!