We asked Chris Formico of The 727 Real Estate Team located in Pinellas County, Florida to give us a quick overview of the market in his city for first time home buyers. Here is an article with 5 suggestions from him on how to set yourself up for success as a first time home buyer.




Considering Buying Your First Home? Here are 5 things you should know that will help you out. 

So even if you’ve half way considered the possibility of buying your first home, you are probably a bit put off and possibly intimidated by the market right now. “It’s a seller’s market!” they say, “Inventory is low!” they say. While both of these things are true, it doesn’t mean that it’s a bad time to buy. Considering that we have all time low interest rates, it’s actually a great time to buy if you know where to look.

I can’t speak for all cities when I assert that it’s a great time to buy, but I know that things in St Pete are a little different than the average real estate market. You see we live in a city that is experiencing a massive cultural revival and influx of development. St Pete used to be a sleepy beach town where retirees would come for the winter, now there’s so much development and emerging culture it seems like it’s turning into the new Miami. Hopefully not though because Miami is a terrible place.

In the past 3 years in just the downtown area alone, St Pete has seen over a dozen new construction developments of condos and townhomes. There have also been countless new bars, restaurants and other establishments that have opened up here. This influx of business and culture has attracted a much younger crowd and now the demographic is rapidly changing. This development in downtown has had a direct effect on the land value around it. There are also other parts of St Pete that are seeing development that is effecting the surrounding value. As a first time home buyer, you want to buy in a neighborhood that will see appreciation over time. There are some neighborhoods that have reached their peak. These neighborhoods many times are really nice however people are paying a premium right now to live in them. If you’re looking to build your wealth in the long term, you want to buy in an up and coming neighborhood so your equity comes from both you paying into the home and the appreciation of your land value.  Here’s a great article to see where the up and coming neighborhoods in St Pete are.

As a first time home buyer, you want to set yourself up for success. There are a few factors that come in on a local level that can save you money when you do this right. As mentioned before, you also want to buy in an appreciating neighborhood to set yourself up for the long term. Here are 5 things to consider that will save you from unnecessary expenses as a first time home buyer.


5. Avoid Flood Zones

As a first time homebuyer, you more than likely will be carrying a mortgage on your home. When you buy in a flood zone, your mortgage lender will require you to hold a flood insurance policy in order for them to protect their investment. Thankfully flood insurance policies are set to decrease next year but we don’t know how long that will last. They’re based on the elevation of your house relative to sea level. It’s not the end of the world to buy in a flood zone if necessary however if you can avoid it then you will most likely cut your insurance costs in half, possibly more. I routinely scope out home owner policies and flood insurance policies when looking into homes for my clients. Many times the flood insurance policy is more than the homeowners insurance. Looking to save about $100/month on your payment? Tell your Realtor that you’d like to avoid the floodzones.



4. Be Aware of HOA costs and what they cover


Looking to buy a condo or a townhome as your first property? Want to live that low maintenance life to spend less time on chores and more time to live your life? I think that’s a great idea – buying a townhome is exactly what I did. Keep in mind that not all homeowner associations are created the same. Ask your Realtor to find out what exactly your monthly HOA fee covers. My HOA fee would be considered high by some – $350/month. I chose it because it covers many things that I would have to pay for regardless. Water/Sewer/Trash would be about $80/month on a single family residence. Exterior insurance would cost another $80/month. If I was to pay for someone to maintain landscaping it would cost at least $60/month. That’s $220 out of $350. That extra $130 covers my exterior maintenance, roof, secure parking and basic cable. These are all things that I would need to pay for at some point so I can justify the HOA fee. Not all homeowners association have such comprehensive coverage, so make sure your Realtor breaks down what your monthly HOA fee covers to fully understand your decision.



3. Apply for your homestead tax exemption!


There is no question, file ASAP!

It literally takes 10 minutes. Once you close on your home, be sure to apply for your homestead exemption. The purpose of the homestead exemption is to reward the people that live in their home as a primary residence. It depends on the price of your property but usually homestead is a $50,000 deduction on the assessed value of the property. For example if your home is assessed at $150,000 you will only be paying property taxes on $100,000. Who wouldn’t want that? You can typically find this on the County Property Appraiser’s website. Here is the link for the Pinellas County Property Appraiser.




2. Ask for Closing Costsbag-of-money

This advice doesn’t just apply to folks buying in our local area. Any Realtor can and should ask for closing costs. If you are buying a home, ask your realtor to write in “Seller pays 3% of total purchase price towards Buyers closing costs and pre-paids”. Let’s say the home is $200,000, you would simply get 3%, which is $6,000 deducted from your downpayment and closing costs at closing. This will free up alittle bit of extra money which is nice to have when you realize that you need new furnishings and other equipment after your move. I did this when I bought my townhome which freed up enough money for me to buy a new patio, grill set and sound system for my living room. All of these things could have been purchased in time however it is very nice to be able to settle in to your new place with everything you need.



1. Consider investing in solar

This is a new idea to many. I used to live in Germany where I’d be driving on the autobahn and see fields upon fields of solar panels.  I knew they were on to something because Germans are the ones who brought us BMW, Hefeweizen and of course my favorite Aldi (yes the cheap grocery store). Technology has made solar more affordable and there are programs out there to make this as easy as possible. Money saving from solar can be huge and you don’t need to have the money up front to buy them. There are programs that will allow you to finance the panels and installation and pay off your loan with the money you’re saving from your drastically reduced electricity bill. If you’re looking for a reputable solar company to give you some more in depth information be sure to check out Energy Solutions Direct.

Solar energy panel collector reflecting sunlight spectrum


Final Thoughts

I don’t think I truly appreciated buying a property until I bought my own. I of course had to have up front costs for my closing but now my monthly payment is less than $900 for a townhome that would rent for $1200. I upgraded from a one bedroom 700sqft apartment to a 1200 sqft townhome and I only pay $150 more per month. I bought in an up and coming community and I expect this home to appreciate in value as I build equity. My goal is to pay the majority of my home off in the next 5 years, use the built up equity as a downpayment on another property and rent this townhome out for some easy passive income. If I do this a few times over, I will have multiple streams of income which will allow me to work less and enjoy my life more. Unlike the stock market, real estate is a tangible relatively low risk investment. If you live in a growing city like St Pete, Florida, buying real estate is a no brainer. Inventory is low and it is a seller’s market yes, but if you’re smart about your purchase it will be a good investment.

If you are looking to buy a home in St Petersburg, Florida be sure to give us a shout. You can email me at [email protected] or give me a call at 727-307-1111.