I Bought My Home in Paradise…What Comes Next?

September 11, 2020

The Sunshine State keeps on shining…by offering some of the lowest interest rates on mortgages in the country. Despite the pandemic, Florida’s housing market continued its positive momentum all summer, with more closed sales, more new pending sales, higher median prices, and more new listings compared to a year ago. It has a median home value on par with the rest of the nation and a growing demand for mortgage loans. According to Freddie Mac, the pandemic-slowed U.S. economy pushed the average 30-year mortgage rate to its lowest point in at least 50 years. The average interest rate for a 30-year fixed-rate conforming mortgage in Florida is 2.99%, one of the lowest in the nation. Low mortgage rates, white sandy beaches, and tax breaks make the Florida real estate market hotter than ever.

The fact is Florida has a lot going for it. No state income tax, low property taxes, no estate taxes, incredible recreation, and beaches makes this state the most desirable place (i.e., for New Yorkers and Manhattanites). As of 2020, Florida is one of seven states that has no personal income tax (along with Alaska, Nevada, South Dakota, Texas, Washington, and Wyoming). Although the main home sales season has been pushed back by 3 months, there is strong buyer activity this fall as the Covid-19 recovery continues. Struggles in other housing markets in more populated cities may add to Florida’s popularity. Certainly, those looking to flee the north are taking advantage of Florida’s home buying opportunities.

Let us say you decided to take advantage of today’s low rates to buy your first or next home in Florida. Now what? There are definitely state specific factors you need to know about and take advantage of. Read on to learn the crucial next steps to take after buying your home in the Sunshine State.

A Few Weeks Before Your Closing:

  • Homeowners Insurance -The thought of reading an insurance policy does not excite most homeowners. However, understanding the most basic coverage can help an insured party recognize their insurance limits and confirm they have the right amounts available for their needs in the event of a loss. Check your homeowner’s policy to make sure it covers losses from water damage, floods, and hurricanes. Make sure it has the right amount of property damage that will sufficiently cover your furniture and other household effects. Also, make sure you are getting all the deductions available from your carrier, such as a reduced rate due to a wind mitigation inspection.
  • Buyers Select Your Title Company – In Florida, the buyer of a home gets the final say on what title company to use. If you have never worked with one before, ask your attorney or close friends to recommend a good title company. The title company is the puppet-master of the whole real estate transaction and makes sure you are buying a home with clear title (no outstanding debts or liens on the property, no open permits, rightful ownership of all other owners before you so no one can try to claim their property back in the future).
  • Pro-Active Attorney – Make sure your attorney is actively following up on the status of any requests from the title company or the seller’s attorney. This will ensure you meet your closing date with no delays.
  • Keep in Touch with the Mortgage Company – Ask for constant updates to make sure your mortgage is approved in time for the closing date.

Move-In Day:

  • Hooray, the day has finally arrived! You have the keys to your property and are ready to move in. Make the necessary arrangements to have the utilities turned on or transferred from the prior owner.
  • Get a deep cleaning before moving your belongings in. This can include paint touch ups, cleaning the air conditioning vents and ducts, carpet cleaning, etc.
  • Update your mailing address online with the post office.
  • If you have purchased a condo, get in touch with the maintenance office to find out when the monthly maintenance is due.

A Few Weeks After You Get the Keys to Your Property:

  • Apply for the Homestead Exemption– If Florida has now become your primary residence, you should learn more about the homestead exemption. This benefit could significantly lower your property taxes and safeguard your home from creditors. Remember that in Florida, a homestead is understood as one’s personal place of residence. This means that you need to be a resident of Florida to claim the homestead. A Florida resident is defined as someone who lives in Florida for at least 6 months and 1 day of the calendar year. The idea is that the person spends the majority of his or her time in Florida during a year. If you are unclear on whether you should apply for the homestead benefit, speak with an attorney to learn all the pros and cons.
  • Putting Your House in a Revocable (Living) Trust– If you have decided to establish your residency in Florida, the next step is titling your Florida homestead in a Revocable Living Trust. The main reason individuals put their home in a Living Trust is to avoid the costly and lengthy court-supervised probate process at death. Leaving real estate assets to a spouse or children in a Will causes those assets to pass through the probate process. Probate court can take anywhere from 3 months to a few years, and the attorney’s fees involved in carrying out the probate process can range anywhere between 3% – 7% of the value of the home. Creating a Revocable Trust will cost a bit more up front, but will give your family tremendous savings in the long run. Furthermore, putting the property in a Revocable Trust will not impact your homestead exemption, property taxes, nor the mortgage interest deduction.

Our experienced estate planning attorneys can help you along your path of being a Florida homeowner. We will explain all the benefits associated with becoming a Florida resident (other than the sunshine) and help decipher whether a Trust is right for your family. Contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to get started on your free consultation. Our attorneys are fluent in English, Spanish, and Russian.