Real Estate Articles

Relocation - Buying a home in another state
By Zev Freidus

Real Estate is local in nature and as such the process of home buying varies from state to state and even from one county to another with the same state. When shopping for a home in another state, aside from the logistical challenges of distance, one must be aware of various aspects of homeownership that are specific to the locale in which they are purchasing their new home. This article is written by a Florida Realtor and therefore is geared toward those purchasing a home in Florida. Although the specifics may vary, the points of discussion are generally applicable whenever one purchases a home in the process of relocating to another area.

When evaluating the price of a home, keep in mind that you must compare the subject property to the local market, not your home town. For example, when people relocate from the Northeast to Florida, homes seem inexpensive to them. Should you need to sell you new Florid home within the next few years, you obviously would not expect to get NY prices, so make sure you don't pay NY prices for it! Conversely, if you are coming from a small town in the Midwest, homes in FL may seem expensive. If you make offers based on what the subject property would sell for in your hometown, you likely will not strike a deal and will be house shopping for a long time!

The method in which real estate taxes are calculated are different in each state. In Florida, the millage rate which is set by each county is applied to the assessed value. The value is reassessed each time the property changes hands. Additionally, Florida has a homestead exemption which limits the amount that a homes assessment can be increased while owned as a primary residence. Therefore, the current taxes on any particular property are of little significance when determining what your taxes will be after purchasing the property. In Palm Beach County for example, the millage rate is just below 2% so the best way to estimate your taxes is to calculate 2% of the purchase price. If you budget based on the current homeowners taxes, chances are you are in for a rude awakening come tax season.

A growing trend in many parts of the country where new construction homes are being built is planned communities. Planned communities are governed by homeowners associations. Townhouses and condominiums are similar but are governed by condo associations. In either case, the governing body will be responsible for maintenance of common areas and will impose rules on homeowners regarding the upkeep of the homes. Homeowners are required to pay monthly assessments to the association to cover the common costs of the community, which vary depending on what the association is responsible for. If you purchase a home in Country Club, membership in the club may be mandatory. Country Club membership typically entails an up front equity contribution to the club. In Florida for example, country club equity contributions range from $20k to $100k and yearly membership dues ranging from $2k to $15k.

Your mortgage company will require that you maintain an insurance policy on your home equal to at least the amount of the mortgage or the replacement value of the home whichever is less. In many states they will require that you have hurricane coverage and if you live in a flood zone, then flood insurance as well. Flood zones are determined by an elevation survey and while you may not be required to carry flood insurance, the incremental cost above your standard policy is minimal and it is worth having anyway. There are several factors that will affect the cost of your homeowners insurance most of which are a function of the age of your home. Homes that are more than 20 years old are significantly more expensive to insure. Homes in Florida that where built after the new hurricane code was put into effect in 1998 are significantly less costly to insure due to the changes in how the homes are built including the requirement for storm shutters.

Home shopping can be an exhausting experience, especially when doing it long distance. With so many people calling themselves Realtors, it is important that you select the right Realtor to work with. Make sure you are working with someone who is a full time Realtor, not a part timer who has a license and tries to make a deal here and there. A Realtor who is Internet savvy will make the process a lot easier by communicating with you via email, sending you listings, pictures and even virtual tours. It is also important to understand that unlike other areas where Attorneys handle the contract, here in Florida contracts are prepared and executed by the Realtor, so a competent and professional Realtor can make all the difference.

Zev Freidus is the President and Broker of Boca Executive Realty, specializing in luxury Florida Real Estate in the Boca Raton and surrounding areas.