As Florida real estate continues to boom, homeowners are taking advantage of the seller’s market. They are seeing multiple offers, often above asking, for their properties, and are making substantial profits off of their original investments. As a seller, it’s important to understand how much you will be paying in closing costs, to determine what your final profit will be after your home sale.
Seller Closing Costs
Both buyers and sellers share the expense of closing costs at the end of a home sale, but they pay for different things. Today, we are going to focus on what the seller is responsible for and how it will impact the final home sale proceeds.
- Realtor Fees. Likely to be one of the biggest expenses for a seller, realtors typically make commissions between 5-6% of the home sale price. Shopping for a lower rate, or selling without an agent, are ways sellers look to save on closing costs.
- Title Search and Closing Fees. In most Florida counties, the seller is responsible for the cost of the title search and associated fees. A title search is the process of examining public records and retrieving documents to determine the property’s legal ownership and find out if there are any liens on the property. Title agents or attorneys that handle title searches perform the search and handle the transfer of the title.
- Owner’s Title Insurance. An owner’s title insurance policy protects the buyer in case an issue arises regarding previous ownership of a title. It will cover anything from clerical errors or full disputes over ownership.
- Florida Documentary Stamp Tax: There is a tax associated with transferring the title to the new owner. In addition, individual counties may also charge their own transfer taxes, so check with your realtor and title company to see what taxes are owed.
- Property Taxes: If the county you live in collects property taxes at the end of the year, the seller will pay property taxes at closing for the portion of the year that they owned the property. Conversely, the seller would be reimbursed by the buyer if the property taxes were paid at the beginning of the year for the months the buyer took ownership.
- Recording Fees: The state or local government charges a fee for legally recording a property’s deed and mortgage information.
- Other Fees: Since every home sale is different, there may be fees unique to different real estate transactions. Some of the most common additional costs are HOA fees, settlement or attorney fees, property appraisal fees, and mortgage payoff and/or prepayment penalties.
Florida is experiencing one of the hottest real estate markets so it’s a great time to sell, but it’s important to understand the closing costs that will be taking a bite out of your profits. Seller closing costs will vary but will typically be in the range of 7-8% of the home sale price including real estate commissions.
At The Law Office of Donna Hearne-Gousse, P.A. we can help you with your closing, title, and escrow needs. You’ll also enjoy all of the benefits associated with an attorney-based title agency at similar, and in many cases, lower costs than a standard title company will charge.
If you are in need of a real estate attorney, we welcome you to contact us for more information.