The great land of opportunity across the Pond still beckons
for British property buyers. Now prices have fallen, stabilised and are now
recovering in our beloved Sunshine State, a lifestyle of winter sun, golf and
beaches is tantalisingly affordable.
It’s just about still the greatest buyers’ market in recent
US history, with property prices frequently 50 per cent less than in 2006, yet
rising consistently now in areas such as Orlando and Miami. And the last time
we looked, Disney World Florida still attracts more Brits that Disneyland Hong
Kong (where property prices have not nosedived, either).
People buy property in America for many reasons, but you can
divide them into two camps: those seeking the ease factor and those the
excitement factor.
It’s easy to buy in America because there are no
restrictions on foreign ownership, we speak the same language, they have a
well-regulated, easy to understand property market plus a sophisticated
internet infrastructure (MLS) that lists every property for sale and every bit
of data you could ever want to know about an area. There are plentiful flights
throughout the year, wonderful roads and welcoming people. It’s just all very
easy – especially if you can pay cash (mortgages are hard to get for
non-Americans).
Culturally, for many British people America is far and away
the most exciting place on the planet, with much of our entertainment industry
coming from there and with every corner from New England to New Mexico, Oregon
to Orlando having some sort of cultural resonance. It’s also a place where many
British people would love to emigrate to “live the American dream” and make a
lot of money.
USA property hotspots
Florida, with its year-round sun and plentiful flights, is
the number one state for overseas property buyers and attracts the highest
number of British buyers. Orlando is the most popular destination for British
property buyers, combining pleasure with business – a holiday home they can
enjoy themselves and rent out to other holiday makers. It's the number one
holiday rentals hotspot for HomeAway.co.uk.
Most construction in the Greater Orlando area came about as
a result of Disney’s development, and the bulk of stock was built before 2007,
when construction pretty much ground to a halt.
So brand new homes are in a minority and are in demand, although resale
typical stucco villas with garaging and their own covered pool start at around
£100,000 these days, with prices still largely dependent on proximity to theme
parks. This market still has a supply of distressed properties, both short
sales and foreclosures, but competition for the best deals can be fierce and
buyers should make detailed inspections to uncover defect, debt or repair
issues with these homes.
Florida’s Gulf Coast including Sarasota, Bradenton, St
Petersburg and Clearwater is the second most popular destination for British
investors. The coastline is hugged by a number of barrier islands that have
become resort destinations, the most well known being Siesta Key, Anna Maria
Island and Longboat Key.
Known as Florida’s cultural hub, with much arts, music and
theatre, the area has some of the world's finest beaches too, lapped by the
warm waters of the Gulf of Mexico. Homes directly on the beach or waterfront
command premium prices, starting around $400,000, but the homes themselves may
be older. Newer construction can be found just a short distance from the coast,
with brand new villas starting around $170,000. Resale condominiums may be
purchased from $50,000 and villas from the low $100,000s.
Further down the coast, Fort Myers properties are priced
around 20 per cent less than similar homes in the Sarasota and St Petersburg
area. Further south in affluentNaples, prices can rise considerably, and you’ll
find many deed-restricted neighbourhoods and country club developments. Villas
start from $300,000 and condominiums from the low $100,000s. Miami is booming again,
with high-end branded condo developments in much demand from international
buyers.
Elsewhere in the USA, British second-home buyers are a much
rarer breed, perhaps surprisingly given the low prices and the country’s
perennial appeal.
California and New York are the most popular areas for Brits
to live and work, and both have exceptionally high property prices in the safe,
cosmopolitan areas where most want to live, and - more importantly - can find
legal work.
In New York’s Manhattan or Brooklyn, or LA’s Santa Monica,
you’re looking at London prices - $400,000 for a two-bedroom apartment.
Go beyond these areas and the price decreases rapidly. The
coast road from New York to Boston, with beautiful countryside and easy access
to either metropolis, has three-bedroom houses in friendly seaside towns and
harbours from under $200,000. Properties with a view of San Francisco Bay may
sell for “a million a window”, but there are attractive inland villages and
towns with houses that are palatial by European standards selling for $150,000
or less.
New England has historically been popular with British
buyers too – especially those relocating full-time to operate a traditional
style B&B, or to work around Boston.
Don’t forget the interior too. The states west of the Great
Plains have been attracting buyers, with their wide open spaces in the north,
such as Wyoming and Montana, the ski resorts of Colorado for top-end ski
properties; and Las Vegas and Lake Tahoe for glamour - and plenty of bargains
currently.
Buying process
The situation in America is slightly complicated by the
variety of state laws, though the lack of a language barrier makes it seem
easier, and the industry is well regulated and very transparent (all properties
are listed on a nationwide database, Multiple Listings System or MLS, of which
all agents have access).
Once the property is chosen, the agent working for the buyer
prepares an offer to purchase a property. Once signed by the seller, this
becomes a binding contract, and the buyer usually pays a deposit into an
“escrow” account of 10 per cent for residents, as much as 20 to 30 per cent for
non-residents.
The buyer will usually instruct a licensed home inspector to
perform a detailed inspection of the property to identify any issues, or repairs
which may be needed. An appraiser will visit the property to give a detailed
report of the home’s market value. A title search is performed to ensure the
property is free and clear of any charges and all building permits have been
closed.
So long as the protections were written into the contract,
should there be issues resulting from the searches and survey the buyer can
still pull out. Otherwise, a real estate transaction can then be “closed” by an
attorney or title insurance company.
Buying costs
Documentary stamps to record the deed with the local
authorities cost 0.7 per cent of the purchase price and can be paid by the
buyer or seller. The title insurance policy is a one-off payment of
approximately 0.75 per cent of the purchase price. Attorney or title company
costs to close the transaction are usually around $700, split equally between
buyer and seller. The buyer may be required to pay home owner association fees
and building insurance in advance and this may be paid at closing.
free classified ads sites of america
You'll also need to find the most cost-effective, safe and
easy way to move your money to the USA to complete your purchase. Bank charges and fluctuating exchange rates
can both have an impact on your overall cost - but you can save up to 4% of the
cost by working with a specialist currency firm. They can help you achieve currency exchange
rates better than the banks, and reduce the risk of your international payments
increasing.
On a £100,000 exchange, a currency specialist can save you
up to £4,000 by providing better rates compared to your high street bank. Click here to read more, or here to download
your free guide to saving money on your purchase.
Buyer beware:
When buying a short sale, buyers should ask who is
negotiating with the lender on behalf of the seller. Ideally it will be a
specialist attorney. Sellers or realtors who negotiate these sales tend to be
less successful and take more time to negotiate than an attorney who knows this
specialist sector.
When buying a condominium, buyers need to thoroughly
investigate the financial health of the condo association. Ideally the
association will have reserves in place for major items such as roof
replacement or road resurfacing. Ask how many home owners are in arrears with
their monthly fees – a high percentage should ring alarm bells as it indicates
an increase in the monthly fees may be inevitable to cover the shortfall.
Beware of past condo or homeowner (HOA) fees that may be
demanded after you buy a house or condo. Buyers should always have an attorney
review contracts and title search documents on their behalf, particularly if
they are buying a foreclosed property.
Need more information?
If you would like more detail about some aspects of buying a
property in Florida, then download our FREE guide, sponsored by
My FloridaProperty Store, which covers the popular regions, with a run-down of the local
property market including the types of property and things to watch. We give
tips on legal, currency and tax as well as the steps involved in the buying
process.
