The Cost of Selling a House in Florida

All across the state of Florida, homeowners are taking advantage of a seller’s market. 

If you own a home in Florida and are considering capitalizing on the low rates and hot markets, there are a few things you may need to consider when selling your home.

What percentage does a realtor get in Florida

The way to get the highest amount for your home when selling your house is through an experienced realty agency who can walk you through the process, identify the ideal price for your house based on the current market rate, look for the ideal buyer for your house, walk them through your home during a visit, negotiate the best price for you, and do the necessary paperwork of property transfer to the very end.

The real estate agent will also take care of general marketing necessary to advertise your house in the market. That includes flyers, postcards, ads on popular real estate website like Trulia and Zillow. They also take care of organizing open-house events.

A residential realtor makes the process a whole lot easier and faster than doing it on your own. Their knowledge, experience and reach are worth their fee for homes that are worth market value.

That’s why it’s possibly the biggest cost to consider when you decide to sell your house.

The current realtor commission rate nationwide is at 6% of the selling price of your house. In Florida, the average commission rate is between 4.5% to 6.0%, averaging at 5%.

At the median home value of $233,700 in Florida, based on data from Zillow, that’s about $11,685 for realtor commission fee at 5%.

The commission you pay your agent is actually shared between your agent selling your house and the agent of the buyer. So if you’re able to agree on a realtor commission of 5%, that means 2.5% goes to the seller’s agency and the other 2.5% goes to the buyer’s agent.

House Staging Cost

House Staging is an additional service you may choose to do to get your house sold faster for more money; it’s part of the marketing effort requiring additional cost.

There are companies that do house staging consultation and services in Florida.

When you have your house staged, it ranges from initial consultation and strategy to actually having the whole service of organizing including painting and finishing done. They can even provide furniture, photography and a dedicated website inclusive of a packaged service.

Home staging service starts off at $150 for simple consultations to $5,500 for a full service with many spending between $1,600 and $2,400 a month.

The benefit of getting a house staged is that you get to sell your house 88% faster and up to 20% more money than if you don’t.

Costs also differ between a vacant and an occupied house.

Escrow Fee

To ensure the smooth transition between a house seller and a house buyer, an escrow agent is tasked to hold everyone accountable for their part of the agreement. This is the way real estate transactions are handled here in Florida.

Either the buyer or the seller can initiate the action of getting an escrow account, though it makes sense for the buyer to initiate it since it’s the buyer who provides the “earnest money” in order to assure the house seller of the buyer’s commitment.

“Earnest Money” pertains to a fund to assure the seller that in the event the agreement falls through, the seller can be covered of any expense, effort and time spent on it.

The escrow fee is typically 1% to 2% of the total house cost.

Is it worth renovating a house before selling?

Generally, renovating your home before listing it on the market will allow you to sell it at a higher price. However, there are scenarios where putting money into the home will actually cost you more than you’ll receive.

If, for example, you have little equity in the home and your balance is close to market value, it’s unlikely that your sale price will increase. In other situations, the property value is simply on the low end of the market, so you have to be very selective about how much you spend (medium vs high quality materials) because there will be diminishing returns on investment.

Now that we’ve started talking about repair and refurbishment to prep the house for selling, we need to talk about the cost of all these.

Repair is not just about painting walls and rooms and doing retouches on furniture and fixtures. It’s especially important when it comes to electrical wiring, plumbing, air conditioning and roofing. These areas are the more important aspects of repair that needs to be assessed as part of the cost to sell any house.

These are all the things a licensed home inspector does. He goes up at the attic, looks over the roof and assesses the flooring. His report also includes the condition of the house windows, doors, foundation and basement.

This is called the pre-listing inspection. It’s a recommended process to know for sure what your house needs before it gets inspected by the buyer’s inspector.

There are home inspection services in any city in Florida. The cost of a home inspection service is about $315 for a small house and $400 or more for over 2,000 square feet of the residential area. Talk to your real estate agent about getting one to look over your house.

Other than knowing what your house needs fixing in for selling, getting a pre-listing inspection ensures you’ll have fewer problems with the buyer’s inspector and be able to control the selling price better. You definitely have better recourse to sell your house at a more favorable rate when you put in the time and effort to get your house a pre-listing inspection and repair.

Covering Your Utility Bills

There will come a point in your sale’s process when you’ll have to move out to your new house, leaving the one you’re selling vacant. What do you do with the utilities?

The rule of thumb when it comes to utilities like water, electricity and gas is to leave them connected.

There are a number of reasons why.

Leaving the utilities connected helps in the process of selling though you will still have to cover for them yourself. It’s still your house until it’s not.

Working utilities allow you to do any pre-listing inspection we just talked about. Pre-listing focuses a lot on the utilities, particularly the physical condition of these connections, wiring and plumbing. They need to be working and show that they are working when the inspection happens. The buyer’s house inspection will want to see the same things.

A buyer may also require an appraiser when he needs to have financing. Appraisers will want to see your house and evaluate the condition of the property before agreeing to lend the buyer of your house. Working utilities in good condition allow the purchase to happen. A good reason to keep them on.

You’d also want to make sure any buyer who does a look-around especially during open house events would want to see your utilities working well.

And lastly, it’s a good idea to keep the utilities on for the upkeep of the house, both for its security and integrity. Keeping some lights on in the evening does prevent break-ins and burglary happening. Allowing your plumbing run especially during winter keeps the pipes from cracking from cold.

Covering for your utility bill will help keep your house in the best shape for selling. It shows your good standing, ready to hand the house over to the new buyer when he’s ready.

Covering Your Mortgage Payoff

Another cost you’ll have to keep in mind when selling your house is the mortgage payoff. Chances are you’re not done paying for your mortgage since most mortgages are spread out over thirty years to pay.

Mortgages are non-transferable unless it’s “assumable”. In which case, the person taking on your mortgage has to first qualify for the loan just as you did before you took the mortgage of your current house.

The bottom line is that you’ll still have to pay for the mortgage attached to your house.

The mortgage payoff is the amount you have yet to pay for your house. It’s the total amount including the interest. It’s not the same as the current balance that excludes interest.

To know what this amount is, you’ll need to go back to your mortgage lender and ask for this amount. They are bound by law to give it to you whenever you ask for it.

Who Pays Closing Costs in Florida?

Typically, the seller and buyer both pay part of the closing costs. The split is negotiable, and in some cases each party pays 50% of the total closing costs.

These fees are due at closing when signing the final documents to transfer ownership of the deed or property. This includes the realtor commissions, services provided during the due diligence and transactional phases, and any taxes or recording fees.

What Does the Seller Pay at Closing?

This depends on what the seller and buyer have agreed on, but the average closing costs run between 3% and 6% of the purchase price. If both parties have agreed on a split, then the seller pays their agreed-upon amount at closing.

The Documentary Stamp Tax is Florida’s Real Estate Transfer Tax, charged at 0.7% except for Miami-Dade County which is set at 0.6% for single-family residences.

Who Pays For Title Insurance? – Buyer or Seller?

When it comes to Title Insurance, it is handled by the buyer of the house. Title Insurance is provided by the Title Agency to protect the buyer against any problem that comes up in the title search on the property and it continues to protect way after the transfer of property is complete in case a claim is made against the title.

How Much Should Title Insurance Cost in Florida?

In Florida, Title Insurance premium is $5.75 for every thousand dollars of the house purchase price up to $100,000. It’s $5.00 for every thousand dollars of the house purchase price more than $100,000. This is under the buyer’s expense.

Is Title Insurance Mandatory in Florida?

Title Insurance is not required in Florida or in any other state for as long as the lender is protected with a loan insurance policy. The Title Insurance is mainly to protect the lender and secondarily the buyer but not necessarily. Therefore, it’s a requirement by the lender that the buyer needs to provide.

Do You Have To Pay Taxes When You Sell Your House In Florida?

If you do make money from selling your house, you still need to pay the Federal taxes on the profit at the end of the calendar year.

Often, it turns out the tax on your sold property is zero but make sure you file it as the cost of not filing can be pretty steep.

Other than that, it’s basically the documentary stamp tax and the annual tax on the value of the property that you do own.

What to do if you can’t sell your house on the market?

There are a lot of cases where homeowners simply can’t sell their house in the traditional manner.

This might be because they can’t afford repairs to bring it up to par, or they have issues with tax delinquency or missed payments.

If this is an issue for you, then listing the house might not be an option for you because it will take too long to sell and the amount of fees you’ll incur will leave you with little to nothing.

In situations like this, it is often best to consider working with a private buyer or investor who can give you alternatives than a normal sale.

These alternatives may include either a cash offer for the home or a form of owner financing, such as a “subject to” where the buyer simply takes over your payments so that you no longer have to make those monthly mortgage notes.

These types of deals do not require any money out of pocket. You don’t have to make any repairs or cover any closing costs or fees. And because no realtors are involved, there are no commissions to be paid out.

Such companies may include Mason Buys Houses Florida, who you can contact to see what they can do to purchase your home.

Be aware of the costs of selling your home

Make sure you consider all the details when selling your home. It’s not as easy as simply just selling it and being done with it. There are costs you need to be aware of because you may not be pocketing as much as you originally thought, and you don’t want to be caught off guard when it comes to expectation of funds after a real estate sale!

How Much Startup Capital do You Need to Invest in Florida Real Estate

How Much Startup Capital do You Need to Invest in Florida Real Estate

Florida has one of the hottest real estate markets in the country and there are plenty of investors that flock here every year looking for a good deal.  If you’re an investor and you’re wondering how much startup capital do you need to invest in Florida real estate the answer is complicated.  Miami real estate can be pretty expensive while other parts of the state have a much lower barrier to entry.

What are Your Goals

Whether you’re investing in Florida or any other market in the country you need to know what you’re goals are.  Are you looking for a quick flip, rental property or some other type of real estate investment?  Is your goal to sit on property that is going to appreciate or are you after cash flow.  Next you have to take a look at the different areas of Florida and the price ranges in each.  Florida offers a variety of prices so there is something for every level of investor.

Location, Location, Location

You can probably find a property with a price point in and around $100,000, that could be a condo or a single family home that you can rent out and generate some cash flow.  Alternatively you can find property at that price point for a quick flip.  But at this price point you will be away from the coasts and the tourist hotspots.  Some of the smaller towns and communities in the interior of Florida is where you will find deals at that price.

You’ll also want to check out the top 12 best places to buy vacation rental property in Florida.

Vacation Rentals

Florida attracts millions of visitors every year and that presents the savvy real estate investor a unique opportunity.  There is big money to be made in vacation rentals.  For vacation rentals you want to look at some of the more populated tourist spots, Miami, Fort Lauderdale, Orlando and Palm Beach.  In Orlando you may be able to find a property in and around the $250,000 range but other communities like Miami or Palm Beach then you can expect to pay $500,000 and more.  Be careful of municipal regulations and homeowners’ associations before you buy a vacation rental property.  If you are unsure how to make money with vacation rentals then here is a guide.

Work with a Realtor

Regardless of where or what type of investment property that you are looking for you will need to find yourself a good realtor that can help you find the right properties.  A good realtor can help you fill your portfolio with the exact type of properties that you are looking for.

The Florida Real Estate Market

The Florida Real Estate Market

Florida is filled with beaches, retirees from around the world and it is one of the hottest vacation destinations in the country.  The Florida real estate market is affected by all of that along with unemployment, taxes and the interest rates on mortgages.  So with the current conditions what does that mean for real estate in Florida for the rest of the year and in 2020?  Let’s have a look at the Florida real estate market and where you should invest.

What’s Happening in 2019

For the past decade every major metro area in the state has seen a jump in the population and that means greater demand for housing.  Greater demand has been driving housing prices up and it will continue to do so.  Housing prices in Florida have risen almost 5% over the previous year.  While the state has seen the population grow the economy is also doing quite well.   The unemployment rate sits below the national average and taxes are also low, Florida is one of the few states with no sales tax making real estate purchases even better. .

Mortgage Rates

If you had asked any expert in 2018 whether mortgage rates would climb in 2019 it would have been a resounding yes, however that didn’t happen.  Mortgage rates at an all-time low and they are predicted to stay that way well into 2020.  You still have plenty of time to get a great deal in 2019 if you shop around.

Housing Prices

The most important aspect that any investor looks at is of course the price.  While housing prices in Florida have been rising for some time it is expected that that growth will slow in the latter half of 2019 and into 2020.  Zillow estimates that housing prices will increase by a little less than 2%.  However the higher end markets like Miami and Fort Lauderdale will see a decline in housing prices.  The highlight of Florida’s market will be in Orlando, Jacksonville and Tallahassee they expect to lead the market growth with prices rising as much as 4%

Nearly half of home sales will go to first time home buyers as more and more millennials are finally entering the market.  Despite the slowdown in housing sales the competition for entry and mid-level priced homes is still going to be stiff.  Investors will have to be quick if they want to strike a bargain.  Sellers have the advantage for the next year or so.

If you are looking to sell your home, make sure you learn more about the cost of selling your house in Florida as there may be all sorts of closing costs, taxes, and unaccounted for expenses that are associated with selling the home.

Top 12 Best Places to Buy Vacation Rental Property in Florida

If you’re looking for a great place to invest in a vacation rental property, the Sunshine State should definitely be at the top of your list. Florida is the nation’s top tourist destination, making it one of the best places to buy vacation rental property in the U.S.

However, the real estate market in Florida is as vast as its beaches, and if you’re not familiar with it, you might not know where to put your investment dollars. So, where in Florida should you buy vacation rental property? Let’s find out.

 

1. Lake Worth

• Median Home Price – $203,400
• Price Per Square Foot – $199
• Occupancy Rate – 51.6 percent
• Monthly Rental Income – $1,560
• Cap Rate – 10.6 percent

It may not have Disney World or the allure of South Beach, but based on all of the most important metrics, Lake Worth is the #1 best place to buy a vacation rental property in Florida. In addition to having the state’s best cap rate, which is largely due to the city’s affordable property prices, this Palm Beach County city is home to a thriving local community.

With beautiful beaches, great shops and restaurants, and a price to income ratio that can’t be beat by any other locale in the Sunshine State, Lake Worth is an ideal place to make a vacation real estate investment in Florida.

 

2. Key West

• Median Home Price – $937, 028
• Price Per Square Foot – $723
• Occupancy Rate – 75 percent
• Monthly Rental Income – $8,675
• Cap Rate – 7 percent

Key West is a premier tourist destination, not just in Florida but across the country. Therefore, it should come as no surprise that we have it near the top of our list of the best cities for buying houses in Florida. Its location and data speaks for itself. This popular tropical paradise personifies relaxation and luxury, both of which are in high demand.

In fact, the demand for weekly and monthly rentals is high, not just in summer but year-round. As a result, Key West vacation property investors can expect a great occupancy rate, high rental high rental income, excellent cash flow, and the joy of owning a little slice of paradise.

 

3. Daytona Beach

• Median Property Price – $253,282
• Price Per Square Foot – $172
• Monthly Rental Income – $2,451
• Occupancy Rate – 53 percent
• Cap Rate – 7 percent

Daytona Beach is another great spot for vacation real estate investment in Florida. This long-time vacation hot spot offers miles of beach, a ton of activities, and is home to one of the world’s most famous speedways.

From the sea and sand to hair-raising speed, a Daytona Beach vacation rental property offers it all. People from all over the U.S. and the world flock to Daytona Beach for motorcycle and NASCAR events throughout the year. With a high cap rate as well, it’s the perfect location to purchase a Florida vacation property.

 

4. Bradenton

• Median Property Price – $287,423
• Price Per Square Foot – $160
• Monthly Rental Income – $2,320
• Occupancy Rate – 54 percent
• Cap Rate – 5 percent

Bradenton is an ideal location for rest and relaxation, making it one of the best places to buy vacation rental property in Florida. Located across the Skyway Bridge from Tampa and St. Pete, its sun-kissed beaches are some of the best in the state and the city itself is known for its charming fishing piers, art galleries, and artisan shops.

Despite its location, home prices in Bradenton are affordable. Combined with its high rental income, solid occupancy rate, and good cap rate, the city is well-poised to provide you with a pretty nice return on your investment.

 

5. Tampa

• Median Property Price – $353,368
• Price Per Square Foot – $188
• Monthly Rental Income – $2,449
• Occupancy Rate – 50 percent
• Cap Rate – 4 percent

If you’re interested in buying houses in Florida to add to your vacation rental property portfolio, Tampa should be near the top of your list. In fact, in 2019, the Tampa area is one of the top 10 locations in the country to invest in. What makes it so attractive for investors?

For starters, it has plenty of affordable properties available in well-performing areas. Like many other locations on this list, it’s also a popular destination for tourists. From its beautiful beaches to its endless cultural events, Tampa is a great city for vacation rental property investment.

 

6. Orlando

• Median Home Price – $241,700
• Price Per Square Foot – $154
• Occupancy Rate – 59.5 percent
• Monthly Rental Income – $1,156
• Cap Rate – 1.46 percent

Orlando has been a tourism mecca since Disney World opened decades ago. However, the tourism industry isn’t the only thing Orlando has going for it.

An Orlando vacation rental property is also a sound financial investment. With median home prices growing by 10 percent year over year, demand for housing is high, which is good for your bottom line.

 

7. Gainesville

• Median Property Price – $263,213
• Price Per Square Foot – $140
• Monthly Rental Income – $2,444
• Occupancy Rate – 48 percent
• Cap Rate – 5 percent

Located 1 ½ hours north of Orlando, Gainesville is home to one of the Sunshine State’s liveliest college towns. The students in Gator Country give Gainesville a carefree and laid-back feel, but there is plenty to do too.

Aside from Gainesville’s many museums, cultural attractions, and vibrant nightlife, the area’s natural beauty is on full display with live oaks, springs, and crystal-clear rivers. With so much to offer, real estate investors with vacation rentals in Gainesville enjoy solid occupancy rates all year long.

 

8. Pensacola

• Median Property Price – $295,826
• Price Per Square Foot – $155
• Monthly Rental Income – $2,021
• Occupancy Rate – 60 percent
• Cap Rate – 5 percent

Pensacola is the kind of seaside retreat people come back to time and time again, which is why it’s on this list as another great place to own a Florida vacation home. Near the Alabama border at the tip of the state’s panhandle, its location, white sand beaches, and emerald waters draw vacationers from near and far.

Aside from Pensacola’s obvious draw, its beaches, it’s also a great sightseeing city steeped in history. That said, it’s also a modern city with lively people and a variety of restaurants and nightlife options. If you want to make a smart real estate investment, it’s hard to go wrong with this quintessential Gulf coast town.

 

9. Miami

• Median Home Price – $519,000
• Price Per Square Foot – $231
• Occupancy Rate – 64.9 percent
• Monthly Rental Income – $3,161
• Cap Rate – 0.89 percent

Miami is home to models and celebrities, but it also draws millions of vacationers each and every year. With robust tourism and one of the strongest economies in the U.S., the Miami housing market is one of the healthiest in the Sunshine State.

With so much to do and see in Miami, investing in a vacation property in this beautiful and luxurious South Florida haven will allow you to enjoy excellent rental income and escape to paradise whenever you like.

 

10. Lakeland

• Median Property Price – $257,173
• Price Per Square Foot – $122
• Monthly Rental Income – $2,244
• Occupancy Rate – 50 percent
• Cap Rate – 4 percent

Ideally located between Orlando and Tampa, a Lakeland vacation home provides the best of both worlds – Orlando’s theme parks and the Tampa area’s gulf coast beaches. As its name suggests, Lakeland is full of, you guessed it, lakes. In fact, about 10 percent of the city is covered in water.

Beyond its lakes and great location, Lakeland is home to many great restaurants, world-class museums, miles of hiking trails, and exotic wildlife. With a healthy average rental income and affordable property prices, Lakeland is a smart choice for any profit-driven vacation home investor.

 

11. Jacksonville

• Median Property Price – $303,877
• Price Per Square Foot – $153
• Monthly Rental Income – $2,119
• Occupancy Rate – 57 percent
• Cap Rate – 3 percent

For vacation rental property investors, Jacksonville offers the perfect combination of affordability and profitability. Jacksonville is also a unique vacation hot spot. With beautiful scenery, plenty of outdoor activities, many popular attractions, and big city living with a small-town feel, it’s no wonder Jacksonville’s occupancy rates are some of the highest in the state.

Not surprisingly, Jacksonville is also the largest and most populated city in Florida, and it keeps on growing at a fast pace. Thanks to its popularity, it’s projected to be one of Florida’s hottest housing markets in the years to come. This is good news for investors looking for a solid return on their vacation property investments.

 

12. Clearwater

• Median Property Price – $362,803
• Price Per Square Foot – $203
• Monthly Rental Income – $2,562
• Occupancy Rate – 55 percent
• Cap Rate – 4 percent

Last but not least, Clearwater is yet another year-round destination any vacation property investor should look into. Home to the #1 ranked beach in the U.S., this popular coastal community is in high demand.

 

Conclusion

With warm weather, world-class attractions, and miles of sun-kissed coastline, Florida is an obvious choice for vacationers and vacation property investors alike. However, with so many great vacation destinations, deciding on a location for your vacation rental property can be easier said than done.

Fortunately, having too many options is a much better problem than not having enough. That said, if you’re thinking about investing in Florida real estate in 2019, you can’t go wrong with any of the places on this list. With the right property at the right price, you’re destined to profit wherever you choose.

When looking for properties, you can often get them at a discount for folks who are looking to dispose of a property and aren’t prepared for the cost of selling a house in Florida.