Understanding Closing Costs

Hands working on financial documents
11/29/2023 | Rafael Amador, LLC |

When it comes to buying or selling a property, understanding closing costs can be one of the more confusing aspects. Here is a simple breakdown of the typical fees and costs you’ll pay at closing…

WHAT ARE CLOSING COSTS? 

Closing costs are standard costs and fees that apply to both the seller and the buyer. These fees are typically charged upfront which means they cannot be rolled into your mortgage payment. Buyers often erroneously believe that only the seller is responsible for closing costs. This is not true by any means.

Many of our home buyers ask for a ballpark estimate for their closing costs. Unfortunately, without having identified the property, it is impossible to determine what those costs will be. Many factors come in to play including the HOA fees, among others. The HOA fee varies by property. Without knowing the exact fees, it is impossible to calculate closing costs.

BUYER CLOSING COSTS IN FLORIDA

In Florida, the buyer has his fair share of costs payable at or before closing. Want to get a very rough estimate on your closing costs as a buyer? The typical buyer will pay 2.5% – 3.5% of the home’s price on closing costs. This includes:

  •  Prorated HOA charges, HOA approval fees
  •  Survey fee ($200-$800 based on land size: $400 -$500 is typical)
  •  Appraisal fee ($400-$500)
  •  Credit report ($50-$75)
  •  Loan origination fees (varies)
  •  Home inspection ($375-$450)
  •  Recording fees ($50-$250)
  •  Wood Destroying Organism inspection ($75-300)*

Some homes located in exclusive areas can have hefty HOA fees which can drive up your expected closing costs to 4% or higher. It’s best to determine the closing costs after you’ve identified the subject property and with all the facts in hand.

SELLER CLOSING COSTS IN FLORIDA

Sellers often brunt a hefty share of the closing costs. Sellers typically pay between 7-10% of the sale price at closing. This includes:

  •  Real estate commission (up to 6% of purchase price)
  •  Transfer taxes/documentary stamp (selling price of home divided by 100, then x .7)
  •  Promissory note (mortgage amount divided by 100, then x .35)
  •  Intangible tax (promissory note amount x .002)
  •  Title search fee ($1,500- $2,200)
  •  Property taxes (since these are paid at the end of the year, sellers may need to pay back the buyer for the part of the year they were living there)

Want to know exactly how much you’ll need at closing? Call us and let’s work together to identify the property and properly calculate all your costs. Don’t wait, text or call us today at (954) 710-2345.