Real estate closing costs are the inevitable fees associated with your home purchase, which are paid at the closing of a real estate transaction. The real estate transaction and sale are officially complete, or “closed” when the title of the property is transferred from the seller to the buyer. In the State of Florida, whether
Real estate closing costs are the inevitable fees associated with your home purchase, which are paid at the closing of a real estate transaction. The real estate transaction and sale are officially complete, or “closed” when the title of the property is transferred from the seller to the buyer. In the State of Florida, whether the closing costs are the responsibility of either the buyer or seller, depends on the county that you live in.
The fees, if you are a buyer that you can expect to be included in your closing costs are:
- Application fee
- Attorney fee (note: you don’t need an attorney to close in the State of Florida)
- Closing fee/Escrow fee/Settlement Fee
- Courier fee
- Fed-Ex fee
- Notary fee
- Credit report
- Flood Determination or Life of Loan Coverage
- Home inspection
- HOA transfer fees
- Homeowners insurance
- Lender’s policy title insurance (unless buying a home in cash)
- Owner’s policy title insurance
- Origination fee
- Prepaid Interest
- Private Mortgage Insurance (if down payment is less than 20%)
- Property tax
- Recording fees
- Survey fee
- Title Company Title Search fee
- Transfer taxes
- Underwriting fee
- VA Funding fee (if applicable)
These closing costs are a combination of fees charged by the mortgage company and the title insurance company. Some fees are required by the state or a government agency and are non-negotiable, while other fees can be negotiated so it’s Important to understand these and see where you can save in your closing.
How to Calculate Closing Costs in Florida?
On average, home buyers pay between 2 and 5 percent of the purchase price of their home in closing costs, so you can do the math from there depending on the price of your home. Home sellers, on the other hand, can pay up to 6% in closing costs (if selling in a seller paid county). Seller costs are typically title insurance and associated its associated fees (i.e., lien search, title search, HOA fees).
Most home buyers and sellers will use an online closing costs calculator to help them identify the exact costs they are facing in their state. For the State of Florida, TitleZoom has an online closing costs calculator that gives you an instant quote that is lower than most other title insurance companies in the state.
It is important to keep in mind that not everything on the list above may be included in your closing costs; it all depends on the price of your home, your financing choice, the condition of the home you are buying (or home you are selling) and the level of inspections you need, the exact geo-location of your home, the types of insurance your location requires, and whether you are paying cash for your home.
If you are buying a home with cash, there are a few mortgage-related closing costs that you can avoid. Some of them are:
- Title Insurance
While you may get out of paying these closing costs in Florida when buying a home with cash and not going through a lender, it does not mean that it is recommended. It may be in your best interest to have the home appraised and inspected, as well as purchase title insurance to ensure that you do not suffer title issues from the previous owner – including debts.
General rule of thumb: get together with your realtor (if you are using one), your mortgage broker, and your real estate closing/title insurance company of your choice to work through all of the associated closing costs, which ones you are eligible to be exempt from, and all the ways you can save.
Why use a title insurance company to assist you in your real estate transaction?
Title insurance companies in Florida are more than experienced enough to handle the entire closing process so that you save as much money as possible. By enlisting a title insurance company in Florida to help you during the entire sales process, before you get to closing, you can ensure that you are getting the best deal on your owner’s (and/or lender’s) title insurance policy. TitleZoom gives you the Butler Rebate on your title insurance, which is a discount on the title insurance. The Butler Rebate is rarely used by title insurance companies in Florida. Because of this, choosing the right title insurance agency is the key to affordable closing costs.
Title insurance protects you and your lender from title defects. A title defect could be a prior owner’s debts or liens against the house, all of which you and your lender do not want to get stuck with.
Title insurance is a one-time fee to protect you and your home. You pay for the policy and then the coverage lasts for the life of the loan (or as long as you own the home).