Buyer's Guide

Many and varied! There are income tax implications if the property is to be rented, capital gains tax considerations when the home is sold, and possible estate tax issues. It is important to consider these BEFORE you purchase a property, and to take the appropriate professional advice on how the property should be titled – your name, a limited company, cross-border trust, etc. The approach will vary, depending upon your citizenship and personal circumstances. Your sales associate will be happy to refer you to a professional who specializes in international taxation.

In your home country, you may be accustomed to working with several real estate agents to be sure you see all properties that are available in the market. Here in Florida, you have the benefit of a computerized Multiple Listing System (MLS), which contains details of almost all properties available in a specific market and can be accessed by licensed Realtors®. This allows you to choose a Realtor® you feel comfortable with and who has knowledge of the local market, as well as the issues you must be aware of as a foreign buyer. Some services your Realtor® will provide include negotiating the best possible terms for your purchase, protecting your interests in the contract, and introducing you to and coordinating with other professionals who will be needed for a successful transaction. A real estate agent who represents a buyer is usually compensated by the agent who lists the property, so these services are normally offered to buyers at no charge.

This is a common misconception. Remember, the listing agent works for the seller of the property. The seller pays the listing agent a commission, which is shared with the agent who brings the buyer. The seller pays the same commission, whether there is one agent involved or two. Having your own Realtor® representing you in the negotiations will ensure you are provided with impartial advice and objective analysis of the property and its price, condition, location, etc.

When working with a salesperson in a new construction environment, be aware that they are employed by the builder to sell homes. It is not their job to educate consumers objectively on the area or the pros and cons of their particular development. The idea that a buyer will get a better price from the builder if the builder does not pay a Realtor® commission is a myth. Many builders pay Realtor® commissions from a separate marketing budget, so they are not factors in discounting a property. Realtors® know how much each property sold for in a particular development and would not bring buyers to a builder if two-tier pricing was in place. A typical builder makes more than 80% of their sales from Realtor® introductions, and they will not jeopardize such a significant source of business.

No. Property taxes are influenced by whether the home you buy is your primary residence or not. A second homeowner from New Jersey or Ohio pays the same taxes as one from Canada, the U.K. or any other part of the world. The cost of homeowners’ insurance is based upon the risk associated with the location, occupancy and condition of the subject property. It bears no relation to the nationality of its owner.

There are a number of ways you can accomplish this, and your sales associate will be happy to introduce you to a specialist in the foreign exchange market. They can offer you better exchange rates than most commercial banks, and a number of tools that will allow you to time your exchange to maximum benefit. They will also allow you to fix an exchange rate now and into the future to help pay running costs, condo fees, etc.

There are varying opinions on which purchase is better, as the value lies within the buyer’s objectives. Here are a few of the more common considerations:

• Amenities – Buyers have more opportunity to choose a color palette and select materials to their preference, such as ceramic tile instead of carpet and better-quality appliances. New homes tend to be more energy-efficient and more likely to meet code standards. An older home will reflect mature landscaping and is often located in an established community with historic charm. Many new subdivisions offer neighborhood clubhouses, swimming pools, playgrounds, bike and jogging trails and picnic venues for residents. Older homes don’t, although many have better access to urban shopping venues and restaurants because they reflect prior self-containing city-planning philosophies.
• Energy efficiency – Advantage: new construction. New-home designers can use new building materials such as Energy Star® windows, thicker insulation and other technology that will lower future energy costs for the owner. Most states now have minimum energy-efficiency requirements for new construction. Kitchens and laundry areas in new homes are designed to house more efficient energy-saving appliances.
• Landscaping – Mature trees, robust shrubs, gardens, rose bushes and perennially well-watered lawns are some of the rewards of an older home, while most new homes are apt to feature younger, smaller trees, fewer walkways and sparse vegetation. Landscaping is an expensive proposition today for the cost-conscious home builder.
• Location – Often older homes are in areas closer to town and in established neighborhoods. However, newer subdivisions can provide newer schools and recreational areas.
• Maintenance – The charm of an older home often goes hand in hand with increased maintenance, especially if the previous owners were not attentive to upkeep. Building materials may be harder to replace or match in an expansion or remodeling. A new home generally comes with at least a one-year warranty for the repair of some problems that may develop as it settles into its foundation but know what your warranty covers. Extended warranties are available should your property be out of warranty. New-construction homes often employ more efficient, innovative uses of square footage and property.
• Price – New-construction homes may cost more than resale homes due to the increasing labor and material costs. There is often more negotiating room with resales as well.