How To: Buy real estate in Florida

Florida, the Sunshine State, is a popular destination among Germans who want to buy a holiday home in the US or want to retire there. The reason: sunshine, the Atlantic Ocean, the Gulf of Mexico, the Everglades and numerous golf courses.

There are no restrictions for foreign citizens who wish to buy real estate.

However, there are some things you have to know:

Agreement of sale and closing of the deal The US has the Common Law system, a system completely different from that in Germany. It is advisable to get a lawyer in the US. The contract for sale and purchase is binding for the buyer and the seller. Independent of that, the second step is the closing, where the purchase price is paid, minus the earnest money you have paid in advance and the warranty deed is handed over.

The earnest money should be paid to an escrow account. A title insurance is necessary since acquisition in good faith does not exist and also registration is not a guarantee. For example, in case it is later discovered that another person has claims as well, you will be compensated. A notary according to the German definition does not exist, the notary public just notarizes signatures.

Realtor The brokerage is usually paid by the seller, but in case you as the buyer commission a realtor as well, you might pay him a brokerage as well, you will sign a written agreement about this.

Prices: From a German point of view, prices over there are extremely favorable. However, please also note that houses over there have a much shorter lifetime. Look around in order to get a feeling for construction, equipment and prices. Don't expect too much of leasing. A frequent change of tenants (Americans are very mobile) leads to a lot of vacancies. Never let them convince you that an unlimited increase in value is possible. This is just not true. Even a rental guarantee doesn't change that. For larger objects you should clarify estate tax aspects before signing the contracts, because estate tax in the US can be very high.

Management For bigger objects, you will always have a facility manager. Giving them authority may make sense in some cases, but never hand over full authority, but only for individual aspects. Before closing the contract, ask how the management works, and what kind of running expenses have to be paid, whether any repairs have to be taken care of and whether there are any reserves.

Inheritance Germany and the US have a double taxation agreement, also for estate taxes, with detailed regulations. Before buying real estate, ask how much taxes you will have to pay in the US and whether there is a way to avoid or reduce this.

RECOMMENDATION: Take your time If you want to buy real estate for your vacation or retirement, remember that the yield is the using an the enjoyment of the house. If you want to permanently live in Florida, you should first of all rent accommodation for a short period of time and take your time looking for something suitable. By the way, this information is not a substitute for a lawyer. So please don't cut corners.

For further information about the legal regulations, please refer to Deutsche Schutzvereinigung Auslandsimmobilien e. V. (www.dsa-ev.de)