Buying in Miami and South Florida: the full guide

Two markets: houses and condos

Houses are selling at a normal pace and rising a few per cent a year. Condominiums are a buyer's market: a year of unsold stock in Miami-Dade, and flat prices. More than half of condo sales in all three counties are for cash, which tells you how hard financing has become in parts of this market.

The building decides the loan

When you finance a condominium, the lender underwrites the building as well as you. After the Surfside collapse, Florida required structural inspections and funded reserves, and Miami-Dade now recertifies coastal condominium buildings of three storeys or more at 25 years and every ten years after, and other buildings at 30 years. Older towers face large repair bills, paid by owners through higher fees and special assessments.

Under Fannie Mae's rules a project is ineligible for standard loans if it needs critical repairs, has failed an inspection, or is operated like a hotel with daily rentals. Before you make an offer, ask the association for the latest inspection and recertification reports, the reserve study, the budget, pending special assessments and the share of units that are rented, and give them to your lender. If the building does not qualify, your choices are a specialist lender at a higher price, or cash.

Buying off-plan

International buyers took 49% of new construction, pre-construction and conversion sales over a recent 18-month period, according to MIAMI Realtors. These purchases work differently from a resale. You pay deposits in stages during construction and the balance at completion, often two or three years later. Florida law protects the first 10% in escrow. Deposits above that can be used by the developer for construction costs if the contract says so.

For financing, the point to grasp is timing. No lender commits today to a loan that closes in three years, at a rate nobody can know. You are relying on being able to borrow, or pay cash, when the building completes, on whatever terms exist then and provided the finished building satisfies the lender. Read how foreign national loans work before you sign.

Financing as a European

The conforming loan limit is the national baseline of $832,750 in all three counties, so many houses above the median need a jumbo loan. Buyers who live in Europe use foreign national loans, with larger down payments. Buyers relocating on a visa can use conventional loans for a home they live in, subject to the lender's view of the building if it is a condominium.

Taxes at purchase differ slightly here. Miami-Dade charges deed stamps of 60 cents per $100, against 70 cents elsewhere in Florida, plus a surtax of 45 cents per $100 on property other than single-family homes, which includes condominiums.

Letting, tax and insurance

Short-term letting is tightly zoned. The City of Miami excludes houses and duplexes in its main residential zones. Miami Beach bans it in single-family homes and in many apartment buildings, and requires a business tax receipt and resort tax certificate where it is allowed. Fort Lauderdale requires registration, at $880 for the first year, and an inspection. In Palm Beach County the host, not the booking platform, must collect and remit the tourist tax. Guests pay 13% tax on short stays in Miami-Dade and Broward, 14% in Miami Beach and 12.5% in Palm Beach County.

Property tax averages 0.81% of value in Miami-Dade, 0.96% in Broward and 0.82% in Palm Beach, but those averages include residents with capped assessments. A new owner who does not live there is assessed at the purchase price. Insurance needs early attention: Miami-Dade and Broward have more policies with Citizens, the state-backed insurer of last resort, than any other counties in this guide. Get home, wind and flood quotes before your inspection period ends.

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