What You Can Expect To Pay In Closing Costs As A Seller Or Buyer In Florida
Even if finding the home of your dreams is a quick and easy process, it will take some time to go from offer acceptance of the offer to the actual closing of your new home.
In many cases, saving up for 20% down to avoid PMI, or Personal Mortgage Insurance, is a hefty amount that truly affects a family’s bottom line. Adding closing costs on top of that can be a burden, and leave you wondering what exactly you are paying for, however, if you are prepared and know what you will be responsible for, the out of pocket expense may not affect you as much.
On the other side, as a seller, you may go into the selling of your home with an idea in mind of what your net income will be from the sale, and how much money you will have left once your current mortgage is paid off.
Either as a buyer or a seller, closing costs are a necessary part of the closing process for the purchase and sale of a home. There are some line items within the closing statement that remain the same no matter which individuals are buying or selling the home, and no matter the purchase price of the home. These line items are the same for every closing.
Additionally, there are line items that are dependent on the purchase price, companies hired for appraisals and surveys, the county in which the home is in and more.
If you are a new home buyer or are thinking about selling your home and would like to have a general idea of what you will be responsible for in this transaction, and the costs associated with each, read on for some guidance.
As a Buyer
If you are a buyer who is purchasing a home using financing from a bank or mortgage lender, there are a handful of closing costs you will be responsible for.
One of the most important fees associated with closing are the recording fees on the deed, mortgage and associated note. These fees may vary by county. Recording these documents with the county is a necessary step in the home purchase process because it is making a formal filing with the county to inform them and the public of the new owners of this home.
Failing to record and file your deed properly can lead to ownership issues down the line, and some mortgage lenders may not release keys to the home until this is recorded! Recording your deed also creates a chain of title to verify the history of ownership. Recording is necessary to obtain title insurance for your property, and definitely needed should you want to sell your new home in the future.
Another closing cost that you will be responsible for as a buyer is to obtain a survey of your property. Surveys are typically scheduled through the title company that is working on the closing. The cost of a survey can vary, depending on which company is going to be completing the survey, and that company’s price may depend on the size of the property, easements, and in general, how much time the surveyor expects to spend on your property. The national average is around $450 for the cost of a survey.
You may also be responsible for the cost of obtaining an appraisal of the property. This cost is also dependent on the company who performs the appraisal. According to Mortgage News Daily, the national average cost for an appraisal by a licensed professional is between $300 and $400.
Additional costs may include applicable attorney fees, title insurance premiums and smaller non-lender closing costs which can include a courier fee, a credit report fee and any certification fees for items an appraiser or surveyor discovers or requires.
One of the largest closing costs may very well come from your lender. Your lender will charge a fee for its services, called an origination fee. Lenders may also charge a document preparation fee and a tax services fee.
On the other hand, if you are buying a home with cash and therefore do not have a financed deal with a bank or any other mortgage lender, you will not be responsible for the items listed above other than the deed recording fees, the inspection and any applicable attorney fees.
As a Seller
Yes, even as a seller and the party receiving the funds from the sale of your home, you will be responsible for some closing costs. Depending on the structure of the closing, you will either pay these costs up front and out of pocket or, much more likely, the costs will simply be deducted from your proceeds.
The largest closing costs that sellers are responsible for are the commissions for both the involved real estate agents. This is for both the seller’s and buyer’s agents. The commission percentages will vary and are typically negotiable, with a Florida average of 6% of the total home sale price, to be divided between the two agents.
As a seller, you may also be responsible for title search charges. A title search is typically required before a title insurance policy will be written for the buyer. The title company will check the chain of title for any mistakes and discrepancies so that a clean title can be issued in the closing process.
You will also be responsible for any outstanding HOA or Condominium Association fees, miscellaneous recordings, and applicable attorney fees. The property tax for the time you owned the home in the current year is another item sellers are responsible for.
This is likely not an exhaustive list of the closing cost line items that you can expect to pay as a buyer or seller. However, it should give you an idea of where to start. When contemplating the purchase or sale of a home, contact the licensed experts who can give you an estimate of what closing costs you can expect, and how much will be due at closing. Regardless of the amount, closing costs are just a small portion of the overall process of buying or selling a home.
Ask a Florida Real Estate Attorney for Assistance!
Buying and selling property in Florida can be a daunting task, but it doesn’t have to be! You do not have to go through the buying or selling process alone. Even with a real estate agent, a knowledgeable attorney can be an asset to have on your side. An attorney can check contracts and other materials prior to closing. If you are thinking about buying property or selling your home, contact the experienced real estate attorneys at Kira Doyle Law to see how we can help. To get started, call our St. Petersburg office at 727-537-6818 to schedule an appointment!