How Much Are Closing Costs in Florida?

Closing costs are fees and expenses incurred at the culmination of a real estate transaction. These costs are distinct from the down payment or the home’s purchase price. They encompass various charges for services and taxes necessary to finalize the transfer of property ownership and secure any associated financing. In Florida, closing costs for buyers generally range between 2% and 5% of the home’s purchase price. For sellers, these costs typically fall between 8% and 10% of the home’s sale value.

Key Closing Cost Items in Florida

Closing costs in Florida real estate transactions include various fees for services and taxes. Each item has a specific purpose and an associated cost, which can vary based on the transaction’s details.

Loan-Related Fees

Loan-related fees are a significant portion of closing costs for buyers using financing. A loan origination fee, which covers the lender’s administrative costs for processing the loan, typically ranges from 0.5% to 1% of the loan amount. Appraisal fees, charged by a third-party appraiser to determine the property’s market value, generally cost between $350 and $700 in Florida; complex properties can incur higher costs.

A credit report fee is charged to pull the buyer’s credit history. Underwriting fees cover the lender’s assessment of the loan application and the borrower’s creditworthiness. If a buyer chooses to pay discount points to reduce their interest rate, each point costs 1% of the loan amount.

Title and Escrow Fees

Title and escrow fees facilitate property ownership transfer and fund handling. Title insurance protects the buyer and lender from future claims against the property’s title. In Florida, owner’s title insurance rates are regulated, costing $5.75 per $1,000 for the first $100,000 of coverage and $5.00 per $1,000 for amounts between $100,000 and $1 million.

A lender’s title insurance policy protects the lender’s investment. Title search fees, for examining public records to confirm ownership and identify liens, can range from $100 to $250. Escrow fees, charged by the escrow agent for managing the closing process and disbursing funds, typically range from $500 to $800.

Government Recording and Transfer Fees

Government recording and transfer fees are levied by state and local authorities. Documentary stamp tax on the deed, levied on real property transfer, is generally $0.70 per $100 of the total consideration paid. Documentary stamp tax on the note, applied to promissory notes, is $0.35 per $100 of the obligation, with a maximum tax of $2,450 for unsecured notes. The intangible tax on the mortgage, a tax on obligations secured by Florida real property, is $2.00 per $1,000 (or 0.002) of the secured amount. Recording fees, paid to the Clerk of Court to record the deed and mortgage, are typically $10 for the first page and $8.50 for each additional page.

Prepaid Expenses

Prepaid expenses are costs paid at closing to cover future obligations. These include prorated property taxes, where the buyer reimburses the seller for taxes already paid for the portion of the year the buyer will own the home. Homeowner’s insurance premiums for the first year are typically paid upfront. If the property is part of a homeowner’s association (HOA), prepaid HOA dues may also be required at closing.

Other Potential Costs

Other potential costs include survey fees, which verify property boundaries and can range from $300 to $900 for a standard boundary survey in Florida. Attorney fees may be incurred if a real estate attorney is involved. Pest inspection fees can also be a cost for identifying potential pest issues before purchase.

Buyer and Seller Responsibilities

In Florida, both buyers and sellers are responsible for various closing costs, though the specific allocation can sometimes be negotiated. Local customs in certain counties can influence who pays for particular items.

Buyers typically cover costs associated with their loan and new property ownership. These include loan origination fees, appraisal fees, credit report fees, and the lender’s title insurance policy. Buyers are also responsible for the intangible tax on the mortgage and recording fees for the mortgage document. Prepaid items, such as initial homeowner’s insurance premiums and prorated property taxes, are also buyer expenses.

Sellers usually pay costs related to transferring the property’s title and real estate commissions. The documentary stamp tax on the deed is typically a seller’s expense. Owner’s title insurance is frequently paid by the seller in most Florida counties. Real estate commissions are typically paid by the seller and can range from 5% to 6% of the home’s sale price. Sellers also handle any existing mortgage payoff fees and prorated property taxes for the period they owned the home.

Some costs can be subject to negotiation between the buyer and seller. These might include survey fees or specific repair costs identified during inspections. The final allocation of certain closing costs can be determined through mutual agreement outlined in the purchase contract.

Reviewing Your Closing Disclosure

The Closing Disclosure (CD) is a form summarizing all final loan terms and closing costs. Lenders are required to provide this document to borrowers at least three business days before the scheduled closing date. This allows time for review and comparison with the initial Loan Estimate.

The Closing Disclosure details all charges associated with the real estate transaction. Sections to review include “Loan Costs,” which lists fees charged by the lender and third parties for loan origination, such as origination fees, appraisal fees, and credit report fees. The “Other Costs” section lists additional expenses like title insurance premiums, government recording fees, and prepaid items like property taxes and homeowner’s insurance. The “Cash to Close” section provides the total amount of money needed from the buyer to complete the transaction.

Compare the figures on the Closing Disclosure with those on the Loan Estimate received earlier in the process. Any significant discrepancies should be questioned and clarified with the lender or settlement agent before closing. Reviewing the document ensures all terms and costs are understood and accurate. This helps prevent unexpected financial surprises at the closing table.