How Much Is the Closing Cost in Florida?

Real estate transactions involve more than just the agreed-upon purchase or sale price of a property. Both buyers and sellers encounter additional expenses known as closing costs. Understanding these fees is important for navigating a real estate deal and helps ensure a smoother process.

What Are Florida Closing Costs?

Closing costs in Florida refer to the various fees and expenses that buyers and sellers typically pay at the conclusion of a real estate transaction. These charges are separate from the property’s purchase price and cover the services and taxes necessary to finalize the transfer of ownership. They compensate various entities such as lenders, title companies, attorneys, and government agencies for their roles in the process.

The specific fees and their amounts can vary considerably based on the property’s location within Florida, its type, and whether the transaction involves financing. Closing costs are unique to each transaction, reflecting the distinct services and requirements involved in every real estate deal.

Key Closing Cost Components for Buyers

Buyers in Florida typically encounter several types of closing costs, especially when financing a home purchase. Loan origination fees are charged by lenders to cover the administrative costs of processing a mortgage application and issuing the loan, often ranging from 0.5% to 1% of the loan amount. An appraisal fee is paid to a professional to assess the property’s market value, which lenders require to ensure the home’s value supports the loan amount.

Other common buyer expenses include a credit report fee, which covers the cost of obtaining the buyer’s credit history. A survey fee may be required for a professional survey to verify property lines and identify any encroachments. Buyers typically pay for lender’s title insurance, a policy mandated by lenders to protect their financial interest in the property should a title defect arise.

Recording fees are paid to the local government to officially record the deed and mortgage. Attorney fees may be incurred if the buyer chooses to retain legal counsel for assistance with contract review or closing procedures. Buyers often pay for prepaid items like initial property taxes and homeowner’s insurance premiums, which are often held in an escrow account. A flood certification fee determines if the property is in a flood zone, and a home inspection fee covers a professional assessment of the property’s condition.

Key Closing Cost Components for Sellers

Sellers in Florida typically bear a different set of closing costs, with real estate commission often being the most significant expense. This commission, usually ranging from 5% to 6% of the sales price, covers the services of both the buyer’s and seller’s real estate agents. The seller typically pays this combined fee at closing.

Owner’s title insurance protects the buyer from potential title defects that might emerge after the sale. In most Florida counties, sellers customarily pay for this policy, though in some areas like Miami-Dade, Broward, Sarasota, and Collier counties, the buyer typically covers this expense. Florida levies a documentary stamp tax on the deed, a state transfer tax calculated at $0.70 per $100 of the total consideration paid for the property. In Miami-Dade County, the rate is $0.60 per $100 for single-family residences, with a potential surtax for other property types.

Sellers pay prorated property taxes, covering their share of taxes up to the closing date. If the property is part of a homeowners’ association (HOA) or condominium, a fee for an estoppel certificate may be charged, which provides a statement of all outstanding fees or assessments. Attorney fees may apply if the seller opts for legal representation during the transaction. If there is an existing mortgage, the seller will need to pay off the mortgage balance and cover any associated recording fees to release the lien.

Estimating Your Total Closing Costs

Estimating total closing costs in Florida requires considering various factors. For buyers, typical closing costs can range from 2% to 5% of the purchase price, with financed purchases often falling into the higher end of this range due to additional lender fees. For example, on a $250,000 home, a buyer might expect to pay between $5,000 and $12,500 in closing costs.

Sellers generally face higher closing costs, often ranging from 5% to 10% of the sales price, primarily due to real estate commissions. Excluding real estate commissions, seller closing costs in Florida average around 3.25% of the home’s sale price. Factors influencing these totals include the property’s purchase price, the loan amount, and whether the transaction is cash or financed.

For buyers, the Loan Estimate (LE) and Closing Disclosure (CD) documents help understand and verify costs. The Loan Estimate, provided by the lender within three business days of a mortgage application, offers an estimate of loan terms and closing costs. The Closing Disclosure, a final statement of all costs, must be provided at least three business days before closing. Consulting with a real estate agent, lender, or closing attorney can provide personalized estimates.