Southwest Florida Real Estate: Faqs for Canadian Buyers and other Snowbirds
With the exchange rate now once again favoring Canadian buyers, we’ve been hearing from a lot of Canadians looking to take advantage of the low prices in Cape Coral real estate, Fort Myers real estate, Fort Myers Beach real estate, Bonita Springs real estate, Sanibel real estate, and surrounding areas.
With low housing prices and a bottoming-out market, coupled with the exchange rate, buying a vacation property now is too good to pass up, our Interenational property buyer clients say.
According to the National Association of Realtors, Canada was the top country of origin for foreign buyers in the United States last year, and more than a third of those Canadians bought real estate in Florida. British and German buyers are also prevalent in Southwest Florida.
And in a recent Reuters article, it was noted that another sign that Canadians are flocking to Florida is Canadian airlines are increasing their direct flights to Southwest Florida.
So we thought we’d take a moment to answer frequently asked questions that Canadians have when buying Southwest Florida homes and condos.
Q: Do you work with a lot of Canadian Buyers?
Yes. Over the last nine years, on average 60% of our clients are Canadian buyers, from Nova Scotia to Edmonton. And, we have helped them purchase all types of properties – waterfront homes, beach homes and condos, golf course condos and homes, vacant land, and new construction.
Q: Do Canadians pay more in property tax than other residents?
A: No. Canadians pay the same property tax than other Florida part-time residents pay. Here’s a link for more on property tax for nationals and internationals.
Q: Is there a sales tax due when buying a property?
A: No. There are some state “documentary stamps” – essentially filing fees – due at closing but they are nominal. The fees do vary if you are paying cash for the purchase or if you are financing. Read about closing costs here. Closing costs are the same for Canadians as they are for anyone buying Florida property.
Q: If I am only in my Southwest Florida home seasonally, say 4 to 6 months out of the year, who takes care of my home or condo while I’m away?
A: For some, the idea of owning a property far away from home is new and a bit daunting. But rest assured, it’s business as usual in our neck of the woods and there are several options for keeping your property safe and secure while you’re away.
Many Canadian snowbirds rely on neighbors – it’s a darn friendly place here and neighbors look out for each others property just as a natural and right thing to do. Additionally, there are professional firms that specialize in “home watch” and property management services for a reasonable fee. Read more about Vacation Property FAQs here.
Q: Should I get a condo versus a single family home because condos are low-maintenance?
A: Not necessarily. Condo or townhouse buildings are indeed low-maintenance (exterior, grounds, community pool, etc.). Yet many who prefer single family homes (say on a Cape Coral waterfront canal) find that hiring services to maintain the pool and lawn is easy and reasonably priced. Again, friendly neighbors are a good help as well as professional home watch and/or property management services.
Q: Who pays for your real estate services?
A: The seller pays the sales commission. The seller is hiring the services of real estate professionals to find a willing and able buyer for the property. We represent you and work to find you the best property, best location, and best value.
Q: Can Canadian Buyers Get a Loan to Purchase Southwest Florida Property?
A: Yes. There are several ways to finance your real estate purchase in Florida. One is through traditional channels in your local Province. For example, Royal Bank of Canada (RBC) offers home loans and has a local branch in Fort Myers. We also can put you in touch with local lenders that offer what is called a “foreign national” loan. And lastly, and perhaps most common, many Canadians leverage equity in their Canadian real estate to take out a home equity loan to finance their real estate purchase here.
Q: Why Is it Beneficial if You Search Properties For Me?
A: If you are not familiar with the neighborhoods, we save you a lot of time and frustration. Our expertise and experience on neighborhoods, pending assessments, construction details, association fees, and location, location, location is what we put to work for you. Instead of searching and searching only to find out that what appears on the surface to be a great house is not…. Let us do the leg work for you.
Q: I see the terms “sold AS-IS” in many of the listings. Are these distressed properties that I should stay away from?
A: Generally speaking the AS-IS stipulation in the listing data is not a concern and does not indicate that the home is woefully in need of work. What it means is that the seller will accept only the AS-IS contract, a standard Florida FAR/BAR approved contract – Florida Association of Realtors the Florida legal BAR (as are all the contracts we used). Most of the contracts we right are AS-IS even on brand new homes or condos.
Our Canadian buyers have told us that buying real estate in their home towns is similar and the AS-IS terms are common there also. In fact, most of our Canadian buyers say the purchase process here is much simpler, and much faster.
The As-is contact stipulates that the buyer has the right to inspect the property and can cancel the purchase contract for any reason. The other contract (non, as-is, or “standard” contract) stipulates a pre-negotiated amount that the seller will pay for any repairs needed for defects discovered during the inspection. Typically that is 1.5% of the purchase price. So when the listing says being sold “as is” it means the seller is saying up-front that they are not going to agree in advance to a repair allowance. So for example, let’s say the inspector says the pool pump should be replaced. In an as-is contract, the buyer can decide whether or not that is an issue worthy of cancelling the purchase contract or the buyer can decide that they still want the home and proceed with the purchase (and replace the pool pump at his/her own expense). At the end of the day, everything is negotiable. But the key difference between the two contracts is that there is no pre-arranged repair allowance in an AS-IS purchase.
Q: Is home property insurance difficult to get?
A: For most Canadians buying property in Cape Coral, Fort Myers, Bonita and surrounding areas, obtaining homeonwers insurance is straighforward. If you are considering buying a single family home directly on the Gulf of Mexico (Fort Myers Beach, Sanibel Beach, Captiva) it might be a bit more difficult, but to date all of our clients have had no problems getting coverage.
Property insurance (wind/fire and flood) varies greatly given the size of the home, its age, construction type, elevation, location and so on. Here is one example for illustration:
The Home: 1997 construction, 2200 sqft under air, sailboat access canal, replacement value $400,000 (cost to rebuild the home on its present site).
The Annual Insurance Expense: $2200 wind and fire, $600 flood. Flood insurance is a separate policy (federally regulated) from the Hazard (wind/fire) policy.
Want to Know More About Buying Property in Southwest Florida?
The SageRealtor Group is at your service! Contact us by toll free phone or email and let’s chat about your objectives and questions.