June 20, 2024

A Step-By-Step Guide For First-Time Homebuyers In Broward County, FL

4 min read
first-time homebuyers

Owning your first home is an exhilarating experience. For buyers seeking homes for sale in Broward County, FL, plenty of great communities await, from vibrant Fort Lauderdale and Pompano Beach to South Florida’s very own Hollywood.

But embarking on your first real estate journey with no clue about the process can leave you overwhelmed. This step-by-step guide will help you get your bearings and avoid costly rookie mistakes.

Step 1: Determine how much house you can afford

In January 2024, homes for sale in Broward County had a median price of $450,000. Property prices ran the gamut, from a low of $200,000 to waterfront estates exceeding $5 million. 

It’s important for first-time homebuyers to determine how much house they can afford. If you’re buying, do you intend to stay within your means or go for something beyond your pay grade in the hopes that future earnings will rise to meet your shortfall?

The correct answer is: assess your finances. Aside from your income, factor in household expenses, existing debt (student loan, car payments), your credit score, your savings, and your insurance. If you plan to take out a loan to buy a house, know that in addition to your monthly payments, you’ll also need to pay property taxes, home insurance, and homeowners association (HOA) fees.

Step 2: Understand the difference between pre-qualification and pre-approval

Being prequalified for a loan means a lender has made an informal assessment of your financial situation (based on the records you provided) and deems you eligible for a certain loan amount. However, neither the bank nor you as a homebuyer is obligated to follow through on the actual loan. At most, a prequalification gives you a better idea of how much you can borrow given your current financial situation and sets the initial parameters on your home buying budget.

On the other hand, a pre-approval involves a more thorough examination of your financial records and is a stronger indication that a lender is willing to provide you with a loan. A pre-approval tells sellers that you not only have the capacity to pay for their house, your lender is ready to release the funds once you close on the property. Because preapprovals are valid for 60 to 90 days only, time is of the essence.

Remember, you can skip pre-qualification and go for a mortgage pre-approval right away especially if you have the credit score to back you up. Learn about the credit score you need to buy a house.

Step 3: Understand  Florida’s tax rules

These are the tax policies you need to know if you’re buying a home in Florida:

  • Florida’s Homestead Exemption. This is designed to reduce the property tax burden on homeowners. It provides eligible residents with a reduction in the assessed value of their primary residence for property tax purposes, leading to lower property taxes. Here’s how to apply.
  • Florida’s changing real estate tax exemptions. Although existing homeowners don’t need to pay income tax in the state, it’s a different story for new homeowners. Following a change in property ownership, state laws require county property appraisers to eliminate any existing tax exemptions and reevaluate the property. This reassessment occurs annually on January 1.

Step 4: Make hurricane preparedness a priority 

Like other areas in South Florida, hurricane season in Broward County is from June to November. Flood insurance and additional wind mitigation inspections are some of the precautions that residents take to adequately protect their real estate investments.

While the state of Florida doesn’t require flood insurance or a wind mitigation inspection, it’s always good to be prepared. Fortunately, flood insurance in Florida is lower by $134 than the national average.  And a wind mitigation inspection in the state costs just $75 to $150.

Step 5: Walk around the neighborhood

Look beyond the house you hope to buy. Check out the neighborhood. You can walk, bike, or drive to get a feel of the community and gauge your impressions of it.  If you’re buying remotely, make it a point to schedule an in-person showing to see if the listing photos live up to reality. Then, tour the neighborhood and strike up a conversation with locals you bump into. All these will factor in your final decision.

Step 6: Order a home inspection

Once you’ve found a home you want to buy,  order a home inspection. Some buyers waive the right to an inspection, but it’s better to be safe than sorry. It also makes sense to schedule a separate wind mitigation inspection (which a standard inspection does not cover). This ensures that your new home is equal to Florida’s climate.

Step 7: Avoid the pitfalls of a first-time homebuyer

As a first-time homebuyer, it’s natural to feel nervous during various stages of the process. However, your game face will be determined by your agent’s professional demeanor (if you actually get to meet the seller and not just their agent).

Your own agent, on the other hand, will help you craft a competitive offer, advise you on the seller’s counteroffer, and generally negotiate on your behalf.  Agents will consider your non-negotiables and offer solutions to thorny issues like low appraisals, title problems, contingencies, and closing delays.

With the advice of an experienced, local agent, you can successfully buy your first home in Broward County, FL.

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