Welcome to Florida, the land of sun, fun, and absolutely no state taxes… Horaaay! Yes, we have beautiful beaches, nice smooth roads, wonderful parks and recreation, but just how does our state manage all this without collecting state taxes you ask?
The majority of that answer is found by exploring two areas of revenue generation. The first is our friend, the lovable Mickey Mouse. Yes, Disney World brings in a ton of tourists who spend quite a bit, and with each dollar spent the state collects its sales tax. Thank you Mr. Walt Disney!
The second, and less entertaining, revenue generating source is our real estate fees! Florida is one of the most expensive states for closing costs, and a big chunk of that goes directly to our city and state, in the form of doc stamps, transfer fees, and recording fees. While these fees can take a bite, there are many other closing costs to consider as well. Some of the most common costs include:
Appraisal. Before a loan can be approved, a lender will require an appraisal by a state licensed professional, who provides a written estimate of the market value of the home based on sales of comparable homes, while making adjustments for any special attributes or flaws of the home. This cost ranges from $300 to $500 for a standard residential home.
Home Inspections. Most lenders require that a home pass through a home inspection before approving the loan. If the lender doesn’t require it, we highly recommend getting it anyway for obvious reasons. The cost ranges from $250 to $500 for a standard residential home.
Survey. Your lender will require a survey of the property to confirm that there are no infringements on surrounding property. The cost ranges from $300 to $400 for a standard residential home.
Mortgage Banker/Broker. These businesses shop different banks and lenders for the best loan terms, then assist in the underwriting process. They can originate, sell and/or service mortgage loans. The typical fee for this services ranges between 1-3% of the loan amount.
Escrow or Title Company. After a buyer and seller agree to the terms, a deposit is put into Escrow and held until the transaction is finalized. The title company does a title search to ensure that the seller is the legal owner, that the property doesn’t have any liens against it, and the property taxes are paid in full. Also, as a lender requirement, you’ll need to purchase a title insurance policy that covers the lender and yourself in case a dispute comes up after the deal has closed.
For more information on closing costs in Palm Beach county or any other real estate related need, feel free to contact us for a direct consultation.
The Law Office of Donna Hearne-Gousse