What Are The Expenses To Sell and Purchase Florida Residential Real Estate?

All of the expenses that are incurred by either the Seller or the Buyer in the process of selling and purchasing real estate are collectively called closing costs. In other words, everything that has to be paid aside from the purchase price is the expense of the purchase and sale. What Are The different kinds of closing costs?

Closing costs are divided between the parties (Buyers & Sellers); the division depends on several factors, including what part of the state the property is located in and the type of contract that is being used to memorialize the terms of the sale. Closing costs are "typically" paid as follows:

Seller’s Closing Costs:

Municipal Lien and Tax Search - determines if the city or county is owed any funds and determines if there are any outstanding violations          against the property

Preparation of the closing documents - (Warranty Deed, Bill of Sale, Owner’s Affidavit, and any other documents necessary to clear any title   issues)

The cost of obtaining a payoff - of any existing loan or mortgage

Recording Fees - on the Deed, the Satisfaction of the Mortgage, and any other documents needed to clear the title

Documentary Stamps on Deed - (70¢ /$100 of the sale price in Florida as a general rule)

Compensation to the Real Estate Broker - for marketing and selling the property, or can be payed to the Buyer for a portion, or all of their closing costs

Title Search - on the property (to confirm the clear title and to clear any liens or clouds on the title before closing)

Property Tax - (share that Seller is responsible for paying pro-rata)

Estoppel Certificates - from the association which show if there are any outstanding fees due to the association and if there are any pending or confirmed special assessments

Condominium Fees - if selling a condominium unit (share that Seller is responsible for paying pro-rata)

Homeowners  Association Fees - (share that Seller is responsible for – paying pro-rata).

Title Insurance Policy - for the Buyer on the property (Usually, the Seller pays for a title insurance policy for the Buyer as protection that there is good legal title passing to them in the purchase)

Buyer’s Closing Costs:

Property Tax - (share that Buyer is responsible for – paying pro-rata)

Homeowners’ Insurance

Condominium Fees - (share that Buyer is responsible for paying pro-rata)

Homeowners  Association Fees - (share that Buyer is responsible for paying pro-rata)

Mortgage Recording Fees

Appraisal

Settlement Fee – the amount paid to the closing agent to close the transaction

Survey of the Property - if not a condominium

Inspection of the Property

Excise Taxes - related to the closing documents (For example, the Promissory Note – see Florida Statute 201.02 et seq)

Flood Insurance Policy - (something that is required in many parts of Florida)

Compensation to the Real Estate Broker - if not paid by the Seller

Additional Buyer’s Closing Costs If There Is A Mortgage Involved:

Loan Discounts - (Points) (there are two kinds of points: (1) fees to pay the loan originators, or “origination points” and (2) expenses to cover the prepaid interest on the mortgage, or “discount points.”  (These can be negotiated with your lender)

Title Insurance Policy - for Lender (the bank will require that the Buyer pay for title insurance on the property, this is a separate policy from the title insurance that the Seller buys for the Buyer, as shown above)

Document Stamps on the Mortgage - (35¢ per $100 as a general rule) (tax to cover costs of obtaining a mortgage – see Florida Statute 201.02 et seq)

Intangible Tax on the Mortgage - (.002 x amount of home or condominium loan) – the State of Florida imposes a tax on loans

Inspection for Termites – these are often required by the lender, especially if the borrower is obtaining an FHA loan

Inspection for Flooding Risk - (”Flood Certification”) – lenders require this for Florida property

Credit Report for Bank - the lender will charge the borrower for the cost of confirming their FICO Score and credit-worthiness

Lender Document Preparation – preparing the note, mortgage, disclosure statements, etc.

Fees for Escrow - of Property Taxes and Hazard and Flood Insurance Premiums

Appraiser’s Fee - (An appraisal is required for a home or condominium loan) – the lender will require that a third-party appraiser confirm the fair market value of the home or condominium before agreeing to lend the Buyer's purchase price.

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