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US Homebuyers Investing In Florida Real Estate 

The amount of homebuyers in Miami have tripled over the past couple of years. According to a new analysis by Redfin, in July the net inflow of Redfin users moving to Miami rose to 7,610 from 2,216 last year. 

Milagros Alvarez, a Miami real estate agent at Redfin, said that “the pandemic has brought even more out-of-towners to the area because so many people can now work wherever they want.”

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“Homebuyers are moving here from all over the map—Atlanta, Cincinnati, New York, Columbia, Mexico City, Pittsburgh and Philly, to name a few. The beaches, warm weather and low taxes are the major draws. Florida has also been much less shut down than other states during the pandemic, which some house hunters see as a positive,” said Alvarez. 

Alvarez also warned that the warm weather in Florida may seem like a main selling factor, but it also comes with its downsides. Miami is one of the most vulnerable cities when it comes to natural disasters or damages caused by weather-related events. 59% of Miami properties face some level of flood risk. 

Sea levels in Miami-Dade County are projected to rise by two feet by 2060, which would displace thousands of residents. The region also faces extreme heat risk, however, Alvarez explained that climate change hasn’t deterred Americans from flocking to the Sunshine state. 

“The homebuyers I talk to rarely mention climate change. Most of them aren’t concerned. A lot of people seem to have this idea that it won’t impact them in their lifetime, so it doesn’t need to be a consideration when buying a home.”

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Daryl Fairweather, chief economist at Redfin, warned that “the recent UN climate report shows that places like Miami will see the impacts of climate change within the next thirty years. Miami homebuyers should think about how they can make their homes more resilient to climate change and how their finances would be impacted if their homes lost value,” he said.

Sacramento, Phoenix, Las Vegas, Austin, and Atlanta have also been experiencing exponential rises in real estate investments, according to Redfin. The report also claimed that US citizens were mainly moving away from New York, San Francisco, Los Angeles, and Washington DC.

“Big, expensive cities normally lose the most residents, and that trend accelerated during the pandemic as remote work gave people the flexibility to leave expensive job centers for relatively affordable places.”

“Yet, a handful of the metros that experienced the largest outflows in July saw fewer people leaving than a year earlier—likely because many of the pandemic restrictions that made those places unattractive places to live have now been lifted,” the report said.

Hidden Costs That All US Homebuyers Should Be On The Look Out For This Year

According to market reports, almost half of all US homes on the market are currently selling within a week of being listed, and prices are continuing to climb in almost every part of the country. 

Many buyers, especially first-time buyers, need to be aware, however, of the multitude of costs that can build up during the final discussions of finalizing a home purchase. Experts claim that all prospective homebuyers should have a separate fund on hand specifically for closing costs. 

These costs typically include things like appraisal fees, property taxes, real estate agent commissions, homeowner’s insurance, title insurance, and more. Jessica Menton, a personal finance and markets reporter, recently discussed the best ways homeowners can plan for their future when it comes to looking for a home. 

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“Generally financial planners say that you should expect to pay somewhere between 3% and 5% of what your mortgage account is, give or take. So for a $300,000 mortgage that means setting aside $9000 to $15,000 for closing costs.”

Bill Gassett, a real estate agent in Massachusetts, stated that when you take out a mortgage, your lender will provide a document that details all of the closing costs involved in the property you’re interested in. Gassett recommends reading this document very carefully, because in some cases a buyer can ask the seller to cover some of the items listed. 

Menton claimed that usually most sellers will pay about 5% of the total sale price in real estate agent fees, commissions, and other expenses, and with most homes now selling well over their asking price, it’s likely more sellers will be less willing to budge on these listed fees. 

“I do sometimes recommend buyers hire an independent inspector, even though sellers will hire one to look for major issues, it can give buyers that extra security.” 

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“When making an offer, buyers typically submit 1% to 5% of the home’s value in earnest so the seller feels comfortable pulling the home off the market. That fee is usually held in escrow and applied to closing costs,” Menton says.

Gassett also warned that if you’re buying a home that’s a part of any sort of association, you need to get details in the beginning about special assessments that will appear down the line of owning the property. 

“Most people know that there’s a condo fee or an HOA fee, but they may not notice a special assessment coming up, where all of the sudden there’s a big extra expense. As part of closing, lenders get the home’s value appraised, because home prices are rising so fast, the difference between asking price and appraised value can now reach into the tens of thousands.That difference can put ardent buyers in a conundrum,” Gassett explained.

“The bank’s not going to do the loan unless the buyer puts more money down, so a lot of buyers are being forced to actually bring more money to the table than they thought they needed.”

Menton also suggests buyers hire a lawyer to get them through the closing period if they’re really nervous about additional costs. Don’t be afraid to pay an expert for their services so that you know the place you’re going to be living won’t end up costing thousands of more dollars than you expected.