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If you’re a current homeowner in Florida, then you probably learned about closing costs when you purchased your first home. These include things like lender fees and transfer taxes which most likely totaled between 3% to 4% of the sales price of your home.
Now, if you’re considering selling your home, you’ll be on the hook for closings costs again that can range anywhere between 5% to 10% of the sales price. These will include things like pro-rated property taxes and real estate commissions that you’ll now be on the hook for as the seller which make the total cost much higher.
Here’s an in-depth look at the closing costs you should expect to pay when selling your home in Florida.
What are closing costs?
Closing is the final stage of the home buying process and the consummation of the sale for both the buyer and the seller. At this point, all documents are signed and mortgage funds are released, finalizing the transfer of property ownership from the seller to the buyer.
At closing, both the seller and the buyer will be responsible for an array of closing costs and fees.
As the seller, your closing cost fees will mostly relate to real estate commissions and the transferring of the deed to your home while the buyer will mainly cover closing costs associated with their mortgage.
How much are closing costs in Florida?
Though all the taxes, fees, lender charges and insurance add up, generally neither party pays 100% of all the closing costs. Instead, the seller will typically pay between 5% to 10% of the sales price and the buyer will pay between 3% to 4% in closing costs.
It’s good to note however, that even though you may avoid the bulk of closing costs, you as the seller will still have to cover realtor commission costs which can add on as much as 6%.
How to Calculate Your Closing Costs in Florida
So how much will you actually pay in closing costs for your home in Florida?
To figure out an estimate of the amount you’ll pay, simply multiply the price of your home by the typical closing cost percentage of 5% to 10%.
For example, the current median listing price in Florida is $275,000. If you multiply this by the typical closing cost percentage (5-10%), you’ll find that your closing costs will range anywhere between $13,750 and $27,500.
What’s included in Florida closing costs for both the buyer and the seller?
While closing costs are normally divided among the buyer and seller, nothing is set in stone. As we mentioned above, all closing costs are negotiable, so it’s important to be familiar with all of them in case your buyer requests you pay a portion of their closing costs. Below, we have listed some of the most common closing costs in Florida and how much you can expect them to be.
Common Florida Seller Closing Costs:
- Real Estate Agent Commission – typically 5-6% of the sales price: Assuming you intend to leverage the expertise of a qualified realtor and the buyer also engages an agent to purchase your home, you’ll be responsible for paying both of them at closing. This amount can differ greatly from one agent to another, but it is typically 2.5%-3% for each agent in Florida. You can reduce this cost by 2% if you sell with a SimpleShowing agent for a 1% listing fee.
- Outstanding amounts owed on the property: You’ll be responsible for any unsettled payments on your home that can include HOA fees (homeowner’s association) and utility bills. All of these extraneous costs will be prorated to your closing date.
- Prorated Property Taxes: Property taxes in Florida are paid in arrears. You’ll owe property taxes for the portion of the year you owned the house (be it 30 days or 300 days). They’ll be prorated based on the number of days you owned the home, so the amount you owe will be much higher for a November closing than one in early January (300 days vs. 30 days). Note: If your current mortgage payment includes an estimated amount for property taxes that they collect and put in “escrow”, then each month you should be able to get your escrow balance back after closing.
- Settlement Fee – typically $350 to $600: While you can avoid attorney fees (Florida doesn’t require an attorney to be present at closing), you’ll still need to pay a settlement fee to the title company or escrow company for their services on closing day.
- Title search – $100 to $200: A title search looks into the home’s ownership history to ensure you’re the true owner and that the title is clear of any liens or judgements.
- Municipal Lien Search – $100 to $200: The municipal lien search looks into unrecorded property issues that aren’t shown in a typical title search, such as code violations, water/sewer/solid waste balances, and open or expired permits, to name a few. The cost varies by municipality.
- HOA estoppel – typically $200 to $500: This letter certifies how much you owe the HOA. It includes your monthly dues, as well as any special assessments, past dues, fines or other fees. Since the HOA could potentially put a lien on your home for unpaid dues or to enforce violations, the title company must confirm that you are in good standing with the HOA and current on all your dues before they can give clear title on the home.
- Documentary Stamps on the Deed – varies with price of the home: Also called a “transfer tax”, this tax is paid to your local county when the deed is recorded. In all Florida counties other than Miami-Dade, it is calculated as $0.70 per $100 (or portion thereof) paid for the property. For a home with the median sales price of $275,000, the document stamps would be $1,925. In Miami-Dade county, the rate is $0.60 for single family homes, with a surcharge for other types of properties. Document stamps are separate from the mortgage tax and intangible tax paid by the buyer.
- Title insurance – rate is set by the state and based on the purchase price: Owner’s title insurance protects the buyer from issues that arise with the title such as outstanding liens that were not discovered in the title search. The rates are set by the State of Florida, but depend on the price of your home. For the Florida median home price of $275,000, your title insurance will cost about $1,450. While who pays this fee is negotiable, the seller commonly pays it in most parts of Florida.
Common Florida Buyer Closing Costs:
- Loan origination fees (optional) – 0.5% to 1.5% of the sales price: These costs relate to any associated loan fees including application fees, prepaid interest, and loan origination fees. While a loan is optional, these will be present if a mortgage is secured to purchase the home.
- Appraisal – $300 to $500: An appraisal determines the value of a home to assure the lender the property is indeed worth the amount they are giving the buyer. The appraisal is often paid by credit card up front and therefore not due at the time of closing.
- Survey (optional) – $350 to $500: Many lenders will require a survey of the property to determine the location of any buildings and the property’s boundaries. Costs typically vary depending on lot size and type of property.
- Credit report – $25 to $75: This fee covers the cost for the lender to pull the buyer’s credit history and credit score.
- Home inspection – $250 to $600: Conducted before closing, a home inspection will reveal any major issues with a home such as structural or foundational damage. Costs vary by company and city — for instance, in Orlando, a home inspection will cost you $450.
- Recording Fees – varies by county: This fee covers the cost of registering the sale and transfer of your property. Once the deed of transfer is recorded, it will become part of the public record.
- Transfer Taxes – varies with amount of the mortgage: Just as the seller typically pays the for the document stamps on the deed, the buyer typically pays document stamps on the mortgage, as well as the intangible tax for the mortgage. These amounts are based on the amount of the mortgage, not the purchase price of the property. The doc stamps are $0.35 per $100 or portion thereof, while the intangible tax is 0.2% of the amount secured.
Should you pay the buyer’s closing costs?
While it may seem counterintuitive to even consider paying for the buyer’s closing costs, helping out the buyer can actually work to your benefit.
By paying for the buyer’s closing costs or even a portion of those costs, you’ll help ensure the sale of your home goes through smoothly. Buyers are saddled with the bulk of expenses in a real estate transaction — from the down payment and mortgage payments to property taxes and homeowner’s insurance, buyers can feel a financial strain.
Paying for some buyer closing costs can relieve the financial pressure on the buyer and provide them with enough financial cushion to sign on the dotted line.
How can you reduce your closings costs when selling your home in Florida?
The best way to reduce your closing costs by a significant amount is to reduce the real estate agent commission.
Remember as the seller, you’ll be responsible for paying all commission costs — both your agent’s commission and the buyer’s agent’s commission. Typically, the standard commission rate is 5-6% of the home’s sale price in Florida.
For a home selling at the state’s median sales price of $275,000, with a 6% average Florida real estate commission, you’d be paying $16,500 in commission.
If those fees seem high, you’ll want to explore all your options on how you can reduce the costs of selling your home and keep as much equity as possible at the time of closing.
At SimpleShowing, you can sell your home with an experienced, full-service agent who works for a fraction of the typical commission fee – 1% listing fee. If you were to sell the median priced home at $275,000, you’d profit about $5,500 more with a SimpleShowing agent.
A SimpleShowing agent can show you how to save thousands in realtor fees if you’re selling in Orlando, Tampa, Lakeland, Miami, Ft Lauderdale, West Palm Beach and surrounding areas in South and Central Florida. Click here to get in touch with a SimpleShowing agent in your area.
Key Takeaways for Florida Home Sellers
It’s important for homeowners to realize that selling your home will probably cost more than you initially thought — you’ll be responsible for commission fees, potential repair costs, staging, and curb appeal expenses, transfer taxes and more.
To help you navigate all your selling costs, it’s important to consult with an experienced real estate agent who can provide guidance on the best approach to sell your home so you get the best deal possible.
And if saving money is a top priority, SimpleShowing can help you put more money back in your pocket when selling your home in Florida.
Connect with a full-service, top-rated agent in your area today who can help you save thousands on commission with our 1% listing commission.