What Are Typical Closing Costs in Florida?

Beyond the purchase price, various fees and expenses, known as closing costs, are incurred in a real estate transaction. These costs significantly impact a buyer’s or seller’s budget. Understanding these expenses is important for anyone involved in buying or selling property in Florida.

General Understanding of Closing Costs

Closing costs represent the fees and expenses associated with finalizing a real estate transaction, covering services and legal requirements for transferring property ownership. These costs are not fixed and can vary based on factors such as the property’s location within Florida, its type, and the specific terms negotiated in the transaction. Both buyers and sellers typically incur closing costs, and while some are traditionally assigned to one party, others can be shared or negotiated.

Typical Buyer’s Closing Costs in Florida

Buyers in Florida typically encounter several types of closing costs, which often range from 2% to 5% of the home’s purchase price, especially for financed purchases. Loan origination fees, for instance, are charged by lenders for processing the loan application and can range from 0.5% to 1.5% of the loan amount. Appraisal fees are paid to a professional appraiser who determines the property’s market value. These fees typically range from $300 to $500.

Buyers also pay credit report fees, usually between $25 and $50. Survey fees, which can cost $400 to $700, verify property boundaries and dimensions. Title-related expenses are also common for buyers. These include title search fees, which ensure a clear title free of liens or encumbrances.

Lender’s title insurance protects the lender if a title defect arises, and buyers typically pay for this policy in Florida if they are financing the purchase. The cost for lender’s title insurance averages around $3.50 per $1,000 of the purchase price for properties up to $100,000, with slightly lower rates for higher values.

Recording fees cover the cost of officially registering the new deed and mortgage with local government agencies, typically ranging from $25 to $100. Attorney fees may apply if a buyer chooses to have legal representation. Additionally, buyers often need to prepay certain items, such as a portion of property taxes and homeowner’s insurance premiums, which are held in an escrow account. Initial homeowner’s association (HOA) dues may also be collected at closing if the property is part of an HOA.

Typical Seller’s Closing Costs in Florida

Sellers in Florida are also responsible for specific closing costs, with real estate commissions often being the largest expense. These commissions typically range from 5% to 6% of the sale price and are usually paid by the seller to both the listing and buyer’s agents.

Another common cost for sellers in Florida is the owner’s title insurance policy. While negotiable, sellers frequently cover this expense, which protects the buyer from future claims against the property’s title. Sellers are also responsible for prorated property taxes up to the closing date.

Documentary stamp taxes, Florida’s equivalent of transfer taxes, are typically paid by the seller. This tax is levied on the deed at a rate of $0.70 per $100 of the sale price in most of the state. Attorney fees may be incurred by the seller if they retain legal counsel. Any outstanding homeowner’s association fees or special assessments are also typically settled by the seller at closing.

Estimating and Negotiating Closing Costs

For buyers, the lender provides a Loan Estimate within three business days of a mortgage application. This document details estimated loan terms and closing costs, allowing buyers to compare offers from different lenders. The figures on the Loan Estimate are initial estimates and can change, but certain costs have tolerance limits for increases.

Closer to the closing date, typically at least three business days prior, both buyers and sellers receive a Closing Disclosure. This five-page form provides the final, locked-in details of all loan terms and closing costs. It is crucial to compare the Closing Disclosure with the initial Loan Estimate to identify any significant discrepancies and ensure accuracy.

While some closing costs, such as recording fees or government-mandated taxes, are generally fixed, others can vary between providers. For instance, buyers can often shop for services like title insurance, surveys, and home inspections, potentially leading to savings. Both buyers and sellers have opportunities to negotiate who pays for certain costs, depending on market conditions and the specifics of their purchase agreement. Buyers might request seller credits to cover a portion of their closing costs, especially if inspections reveal necessary repairs.