Florida’s real estate market is not only booming right now, but to add to that confidence level- know that it is also one of the most stable and promising markets in the U.S! There are plenty of home buyers out there right now, and if you are going to be involved in either the sale or purchase of a home, it’s wise to be prepared and educated about the closing costs and fees involved in with completing the transaction. Let’s review in general some of the common closing costs, what those costs are for, who pays for what, and discuss what costs might be negotiable.
Common Closing Costs
- Title Search – Looking into the background of the property for any judgements, unpaid claims, open permits, and easements. Reviewing details of the chain of ownership making sure all previous transfers were done correctly. (Seller or Buyer)
- Title Insurance – Purchased to protect against liability from any claims that might have been missed by the title search. (Seller or Buyer)
- Attorney Fees – Representation during the transaction to protect against liabilities and ensure all legalities are met. (Seller and/or Buyer)
- Unpaid items – Judgements, liens, HOA/Condo fees, taxes, utilities. (Seller)
- Credit Report Fees – Mortgage lender will start the application process by pulling a full credit report. (Buyer)
- Loan Origination Fees – Typically a lender charges a small fee to open a mortgage account. (Buyer)
- Home Inspection Fee and Termite Inspection- Making sure there are no undisclosed or undiscovered problems with the property. (Buyer)
- Appraisal Fee – Lender will order an appraisal to make sure the home’s objective value is in line with the amount of money being loaned to the buyer. (Buyer)
- Survey Fee – Establishes the exact borders of the property being sold. (Buyer)
- HOA transfer and application fees. (Buyer)
- Transfer Tax/Documentary Stamp Taxes – Florida state fee for transferring a property from one party to another (Seller and Buyer)
- Recording Fees – Florida counties charge fees for producing and recording documents associated with the sale. (Seller and Buyer)
- Mortgage Payoff/Prepayment Penalty – Payment for outstanding balance on the current mortgage and any fees associated with it. (Seller)
- Real Estate Commission – Fees paid to the real estate representatives of both the buyer and the seller. (Seller)
- Settlement Fees – Paid to the settlement agent or escrow holder for services rendered. (Seller and/or Buyer)
Is it Possible to Cut Down on Closing Costs?
There are several ways to save. For instance, in Florida, depending on the county the property is located in, the fees for a title search and title insurance are often paid by the buyer, but can also be negotiated between the two parties. Commissions may also be negotiable. However, the time to negotiate that is before signing the listing agreement, and by the seller. State and county fees are non-negotiable, but for the buyer, it is not a bad idea to shop around for prices from private companies, including lenders, home inspections, or survey services. In addition, if flaws are uncovered by an inspection, the buyer can ask the seller to make the repairs or credit the buyer for the cost of repairs with a seller’s concession at closing.
When buying a home and obtaining a new loan, an estimate of closing costs will be provided after the loan application is submitted. This disclosure provides the buyer with a good faith estimate of what closing costs will be in the real estate process. The itemized list of all charges will be prepared when the buyer closes and take title to their new property. For sellers, ask your listing agent to sit down with you and give you a list and approximation of the various fees.
Contact Glenn & Phanco, P.A. for Your Real Estate Transaction
Whether you are buying or selling, our real estate attorneys are well-versed in all of the processes, legalities, and documentation to ensure a smooth closing. We help our clients save on unnecessary fees and know what to look out for to protect their best interests. Contact us today for assistance with title searches, title insurance, and all aspects of your real estate transaction. We look forward to working with you!
Disclaimer: This blog is not intended to provide advice or legal information. All facts, information, and data provided on this blog is for informational purposes only as well as to give general information and a general understanding of the law, and not to provide specific legal advice. By reading this blog you understand that there is no attorney client relationship between you and the publisher. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.