BUYING GUIDE FLORIDA
have this level of expertise). Also, do not fall into the hands of a seller’s agent. Traditionally, the buyer doesn’t pay anything to an agent, but the seller does. T e commission is split between the seller’s and buyer’s agents, but if you sign up with a seller’s agent by mistake, he will try to hold onto all the commission without giving you the buying advice you require. 2. T e good news is you do not have to trawl round several agents’ offi ces to see what properties are for sale, like in the UK. With the American Multiple Listing System (MLS) available to all realtors, virtually every property is listed on one large central database. Rather conveniently, you can access all the property stock for sale from just one agent’s offi ce and view it by price, location and other criteria. 3. T ink about the sort of property you want to buy and how easy it will be to sell on. You might be keen to own a home in a quiet development not close to shops or a good school. T is might suit you as a holiday homeowner, but when it comes to re-selling, it is unlikely to appeal to American families who want such amenities on their doorstep. Ideally, your home should appeal to as wide a market as possible. Equally, it you want to let out your property, keep in mind Americans and Britons have diff erent tastes – Americans favour apartments or condominiums, while the British prefer houses. Make sure you purchase the right sort of property for the main lettings market. 4. Once you have found a property, the buyer and seller will both sign a contract that sets out the conditions of the sale. T is should include property title checks and inspections. Remember, that typically a house survey in America isn’t as rigorous as one carried out by a chartered surveyor in Britain. You might have little recourse if a boiler breaks down, for instance, which you believe the surveyor should have informed you about. In some instances, it might be worth paying extra for a more detailed survey. 5. A 10 per cent deposit is paid when contracts are signed. It is general practice for the purchaser to buy the property in the state it is in and you cannot complain about any defects once the deal is closed. So, it’s important you check for any fl aws or defects before the contract is fi nalized, and defi nitely before the fi nal closing date on the transaction. T e buyer will lose the deposit if he backs out of the deal, unless the property fails to meet the conditions of sale in the contract. 6. In the US, the closing date is established when both parties sign the contract. T is is the time when all the duties and obligations under the contract are satisfi ed. T is includes the obligation of the vendor to make sure the title to the piece of real estate is ‘clean.’ Also, the buyer has to get all his fi nancing in order. Generally, the closing
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date is 30 days from the signing of the contract. However, this can vary, and both parties must agree the fi nal closing date. 7.T e buyer and seller appoint a settlement company to complete the transaction. T e buyer pays the balance owing and both parties sign all the fi nal documents. A buyer would be wise to take out title insurance before the closing date, which will protect him should a situation crop up where the title to the underlying real estate ends up being clouded. A clouded title is one where another person or entity ends up having an interest in the property that for some reason was undiscovered. Mistakes can occur and liens held against the property, so it is sensible to protect yourself against any expenses or loss you could experience if there is a problem with the title. 8. T e transfer of ownership is registered with the local authority aſt er completion. Generally, the local authority assesses property taxes on your purchase. T is property tax (about 1-1.5 per cent of the purchase price annually) is included in the closing costs. If you are buying on a development, add in homeowner association dues. Americans do not always use a solicitor (or lawyer) when buying a house, but it is recommended you hire someone to oversee the paperwork and represent your
interests. For the sake of a few hundred pounds, it will give you peace of mind. You might even give your solicitor power of attorney to act on your behalf and speed up the process, particularly if you are thousands of miles away in the UK.
Taxes As a foreign buyer, it’s vital you understand the tax implications of owning a second home in Florida. Foreign purchasers, just like US citizens, will be subject to various state and county taxes at the time of purchase, annual taxes based on the value of the property, and on any value gains made when the property’s sold. Foreign investment in the Real Property
Tax Act of 1980 (FIRPTA) requires that an amount equal to 10 per cent of the selling price is withheld from a foreign seller of real estate. T is is held to cover potential taxes on the profi t, but the 10 per cent withheld can be far higher than the actual amount of tax due. T e foreign seller then needs to fi le for a tax refund to collect the excess amount of tax withheld. A foreign purchaser is wise to talk to a tax attorney or accountant prior to selling a property. Foreign buyers are also eligible to defer
the tax of gains when they sell an investment property held over for one year, and then
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