One thing that many people don’t consider when buying a home is how their Realtor’s knowledge of the local market can affect their home buying process. Consider hypothetically that you are on a TV game show and you have to to pick the best Realtor out of 5 choices.
This Realtor has to complete the transaction and get you the best possible outcome. Which one should you pick? Is the best Realtor the one who has the nicest clothes? Maybe it’s the one who boasts about how much volume they’ve sold.
Perhaps it’s the one that knows the difference between marble and granite. Here’s a hint, it may be one of the above choices but the most important thing is picking a Realtor that knows how to look out for your best interests.
The ability to look out for a client’s best interests stems from knowledge of how the home buying process works in general and other factors that come in on a local level. With that said, let’s get into the 6 things that your Realtor should know when buying in Pinellas County, Florida.
6. Flood Zones
You’ve probably heard the horror stories about flood zones and the insurance premiums that go with them. If you hold a mortgage on a property located in a designated flood zone, your mortgage lender will require you to carry flood insurance.
Flood insurance many times is almost as much if not more than paying for a regular home owners insurance policy. This in effect can double the cost of insurance for your home. For a period of time the federal government was subsidizing the cost of flood insurance to keep it affordable for the homeowners in these flood zones.
This subsidy is now getting phased out and flood insurance is rising. If you are looking for your first home and would like to be somewhat conservative with your finances, I would recommend buying outside of a flood zone. If you’re set on buying a waterfront property or buying in a nicer neighborhood where you believe the extra cost would be worth it, then by all means buy in a flood zone.
If you find a home you like in a flood zone, we can have our insurance broker give you a quote before we get the home buying process started. Make sure to ask your Realtor if any home you are interested in is located in a flood zone. You can start your home search right here on our website.
5. Appreciating Markets
Pinellas county has a wide variety of neighborhoods and sub cultures. Some of these neighborhoods are absolutely gorgeous, well maintained and are the place to live if you can afford it. You may be able to buy a house with a 30 year mortgage and have a predictable payment, however these neighborhoods may not be the best place to live if you’re looking to see a significant amount of appreciation.
There are other neighborhoods however that may not be top notch right now but they are in the process of improving. Pinellas County is the most densely populated county in all of Florida and the vast majority of the land has already been built on. We have no room to build out, so we must improve the neighborhoods we already have.
This is great news because we can target the neighborhoods that are up and coming and the homes we buy there will eventually see appreciation if we hold on to them for an extended period of time. Here’s a list of Top 5 Up and Coming Neighborhoods To See Appreciation in St Pete that may be helpful in your home search.
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4. Exterior Construction
There are two main types of construction that you will see in this area. Homes built before the 1940’s are typically woodframe construction and homes built 1950’s and later are many times block or brick construction. Some homes have a combination of the two, most of the times these homes are two levels with a block base and a woodframe second floor.
There are some differences that you should know about when looking for a home. Woodframe homes many times have what people would consider character and charm. Many of these homes have beautiful decor and unique living spaces that is desirable for many people. The downside is that woodframe houses are more prone to termite damage and they are also a bit more expensive to insure because they’re not quite as sturdy as block homes.
Everyone should consider all options when buying a home but here’s my opinion – Block homes on a slab are the safest way to go. My home is a block construction townhouse in a non-flood zone which I love because it is extremely low maintenance and it feels safe during storms. If we ever get a direct hit from a major hurricane I don’t want to be performing a rendition of the 3 little pigs and letting that hurricane in my home, not even by the hair of my chinny chin chin.
3. Ask For Closing Costs
This is something that should be recommended to you by any Realtor, not just in Pinellas. When putting in an offer, you can and should ask for the seller to pay a portion of your closing costs. The seller will more than likely have equity in the home and be able to pay a chunk of money at closing towards your closing costs.
Your contract price may be a few thousand higher but you will save yourself a good chunk of money at closing and that few thousand will just get rolled into your mortgage. When you close on a new home you will need a decent amount of excess money in case you need to buy any new appliances, furniture or furnishings for your new living space.
If you were to buy a $200,000 home and the seller agreed to pay 3% towards your closing costs, you would simply get that $6,000 deducted from your total downpayment and closing costs at closing. I did this when I bought my home and it allowed me the extra money to buy a new patio set and grill, a sound system for my TV and a few other furnishings that just really helped me get settled in for the long term. Make life a little easier and ask for closing costs.
2. HOA Fees & Special Assessments
This is another thing that should be known by any Realtor but there are a few specifics involved when living in Pinellas. Townhouses, condos, co-ops and sometimes even housing developments require an HOA fee. There are a few things you need to analyze when considering purchasing in one of these areas.
First, how much is the HOA fee and what does it cover? My HOA payment is a bit expensive compared to others but it covers water/sewer/trash, exterior maintenance and insurance, lawn care, basic cable, a pool and the communities security gate. Most of these expenses I would need to pay regardless if I lived in a single family home and it affords me the luxury of convenience so I don’t mind at all. Some HOAs will also cover more things such as electric and flood insurance.
Some will also cover less and it will be up to you to set up your own water/sewer/trash and pay for a full exterior insurance policy. These are all things you need to gauge before making the decision to live in an association. One more important thing to ask your Realtor to find out for you – Does this association have any pending special assessments?
You might have heard about the nightmare the residents of the Signature Condo Building in Downtown St Pete went through. It was discovered that this building which was built in 2007 had structural problems and the rebar needed to be reinforced. Owners were charged a special assessment, which was an unexpected cost ranging anywhere from $10,000 for the studio units to over $100,000 for the penthouse units.
This was a bit of an anomaly, usually your Realtor can find out if there are any pending special assessments before you buy and if it will cost you out of pocket, or if the association has a strong enough reserve fund to take care of all the costs.
Special assessments usually come in the form of new roofs, exterior maintenance or work to any community commodity such as pools, tennis courts, boat docks and more. Every community is different so make sure your Realtor finds out exactly what you’re getting into so there are no surprises.
1. Taxes and Homestead Exemption
Yes, we need to pay property taxes when owning a home. The good thing is that compared to many other states, property taxes are actually pretty reasonable here for the most part.
Needless to say, that’s not always the case and should be reviewed when considering purchasing a home. Keep in mind that the current taxable amount will be re-evaluated once you buy the property. For example if you look at a home that’s been owned by the same family for 30 years, the taxes will likely be reassessed at a much higher rate when you buy it.
If you buy a home that has been owned by the previous owner for 5 years, your taxes will be reassessed however they are not going to change as dramatically. A good way to gauge this is look at other similar properties in the neighborhood that are of comparable value but have been owned for only a few years.
The good news is that once you buy a home, it takes about 10 minutes to apply for a homestead exemption. You may only apply for a homestead exemption if the property is your primary residence. A homestead exemption is up to a $50,000 deduction on your assessed value.
For example if you have a house that is assessed at $100,000, you will only be taxed on $50,000 of that home when you have the exemption in place. Another benefit is that once you have a homestead exemption your property taxes will not be able to be raised by more than 3% every year. There are also other tax deductions that come along with owning a home, be sure to ask your accountant about all the available options.
Are you looking for a great Realtor in Pinellas County?Feel free to email us at firstname.lastname@example.org.
As your go-to real estate experts, we are happy to provide you with detailed property information and schedule a showing even if the home is listed through another agent or brokerage.
Contact The 727 Team for assistance and to make an offer!
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(all data current as of 11/30/2020)
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