In last month’s blog post, we discussed the costs sellers are responsible for when they close on their properties. Now let’s talk about what buyers can expect to pay in closing costs. Believe it or not, many buyers are so focused on the purchase price of homes that they neglect to factor in these additional costs they will incur as part of the real estate transaction. If you’re looking to buy in this hot Florida market, you need to know just how much you will be spending so you can budget accordingly.
Buyer Closing Costs
As a good rule of thumb, buyers can expect to pay between 1 and 3% of the purchase price on closing costs. Cash buyers can expect to pay on the lower end. In general, the bulk of seller closing costs usually relate to real estate commissions and deed transfers, while buyer costs focus on loan origination related fees, recording fees, and title insurance. Here is an overview of what you may expect to pay as a buyer:
1) Appraisal Fees: the cost of having a professional appraiser look at a home and estimate its market value for loan purposes.
2) Loan Origination Fees: covers all fees associated with your loan, such as application fees, miscellaneous loan origination fees, and prepaid interest.
3) Credit Report Fees: lenders often charge a fee to check the buyer’s credit score and history.
4) Inspection Fees: the cost of having a professional inspect and investigate the property to uncover any issues before the sale is closed.
5) Recording Fees: Florida counties incur a fee for registering the sale and transfer of the property.
6) Optional Survey Fees: some lenders require surveys of a property before giving a loan to a buyer. Costs will vary based on home location and size.
7) Attorney Fees: it is recommended that you retain a lawyer to help guide you through the real estate transaction process.
8) Title Related Fees: the cost of a lien search, title insurance and escrow closing fees.
As Florida continues to see an influx of buyers from out of state, it’s important for potential homeowners to understand all of the costs associated with their purchase. There can be some negotiation between sellers and buyers to determine the costs each is responsible for, but in general, Florida buyer closing costs include loan origination, inspection, appraisal, recording and title fees. Be sure to go over any questions regarding closing costs with your attorney or realtor to avoid any surprises.
At The Law Office of Donna Hearne-Gousse, P.A. we represent both sellers and buyers with their 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.
The Law Office of Donna Hearne-Gousse
Royal Palm Beach, FL