Closing costs are the fees paid at the time of closing a real estate deal either by the buyer, seller, or both. Albeit stressful, closing costs are exciting as they represent the moment when the title of the home is transferred from the current owner to the buyer.
Here are answers to some of the most commonly asked questions we get about Florida closing costs.
1. What’s included in closing costs for buyers?
The buyer’s closing costs are negotiated and laid out in the Purchase and Sale Agreement, your official contract, which is entered and signed by both parties. If paying cash for a property in Brevard County the closing costs are only a few hundred dollars, as the seller is responsible for closing costs.
Things generally included in closing costs:
- Home inspections conducted by buyer (including pest inspection and WDO inspection)
- All taxes and recording fees on mortgages
- Immaterial tax on mortgage
- Survey, it is recommended to purchase the survey prior to closing. The average survey ranges in price between $300 and $800—based on the size of the land.
- Appraisal fees
- Recording fees, recording Deeds and Mortgages as public record is $10 for the first page and $8.50 for every page thereafter. Deeds are generally only 2 pages long, and the average Mortgage is around 16 to 30 pages.
- Title policy and endorsement from lender.
- Wood destroying organism (WDO) report, the average cost is $80 and it is highly recommended regardless of a home’s age or condition.
- Title insurance related costs
If you are financing the purchase, your lender should give you what’s known as a ‘Good Faith Estimate of Closing Costs’. This will include all of the costs outlined above, as well as lender’s costs.
2. What are the closing costs for sellers?
If you are selling a property you may also have closing costs. Seller’s costs are also agreed upon and outlined in the Contract.
Typically, seller’s costs include:
- Title search charges
- Documentary stamp taxes + surtax on deed
- Estoppel fees associated with HOA/Condominium association
- Recording fees, as well as any other fees necessary to cure title
- Seller’s attorney’s fees
- Seller’s realtor’s commission
3. Do I need to hire an attorney for closing?
In most states, a lawyer generally represents both parties through the closing process. In Florida it is not mandatory for a lawyer to be involved in the process, although certain contracts may outline the need for one. An experienced real estate agent will be able to guide you in the right direction regarding if you need a lawyer at the time of closing or not.
4. Do I need Title Insurance?
Title Insurance is mandatory if you are purchasing your home with a mortgage. This insures the mortgage at the time of closing. In Florida, the seller pays for title insurance.
A Title Insurance Policy protects you against:
- False impersonation of anyone on the title
- Forgery and fraud
- Deeds that are not properly executed
- Any heirs of former property owners not formally included in the deal
- Deeds that are not signed by a required spouse
- Anything relating to the Survey
- Any liens that suddenly become known post-closing but prior to recording of instruments.
5. If I’m paying cash for a property do I need Survey and Title Insurance?
It is not legally required to obtain Survey and Title Insurance if you are paying cash for your home, although it is still highly recommended. During most residential transactions the seller pays for Title Insurance.
As outlined above, this type of insurance protects you against so many different types of potential issues. The best thing about title insurance is that you only pay for it once but it covers you for the remaining time you own your property.
6. Do I need to be there during the actual closing?
You do not have to be physically present for the actual closing. Many clients live out of the state or even country, or are just too busy to attend the closing. In this instance, you will remain in the loop through email or Federal Express. You will be provided with in-depth instruction as to how to properly execute the documents.
7. What forms of payment are accepted for closing costs in Florida?
Bank certified or cashier’s checks are not accepted anymore due to fraud. You must wire transfer funds to the specified trust account the day before closing. Forms of payment that are not accepted for closing costs UNLESS you get them in 10-days prior to closing: bank certified checks, personal checks, or out of state credit union cashiers checks. 10-days allows plenty of time for funds to clear in time for closing.
8. Do closing costs vary if I am purchasing a home in a deed-restricted community?
There are many deed-restricted communities in Florida, although that doesn’t mean there will be anything different about the closing process. It is up to the current owner to specify if a home is in a deed-restricted community and all pertinent specifications and fees.
There is a Homeowners’ Association/Community Disclosure required by Florida law, which will be present at the time you sign the contract. This disclosure outlines all of the homeowner association fees, regulations and so forth. Buyers have the right to cancel the contract if they are not given appropriate disclosure about HOA fees, regulations and so forth.
Have any more questions about closing costs in Florida? Curri Properties would love to help answer them! Contact us today to learn more about our full-service real estate team.