In last month’s blog, we discussed the costs sellers usually pay when closing on a property. Buyers should also budget for closing costs, which are the various fees and charges associated with obtaining a mortgage and completing the real estate transaction. While the exact amount varies by property type, purchase price, location, loan amount, and contract terms, understanding the more common expenses can help buyers avoid surprises at closing.
Common Florida Buyer Closing Costs
A common rule of thumb is to budget 2% to 5% of the purchase price for buyer closing costs, although the actual amount can vary. Buyers should remember that closing costs are separate from the down payment and cash buyers can expect to pay at the lower end. While fee responsibilities can be negotiated between buyer and seller, below is an overview of what you may expect to pay as a buyer:
- Appraisal: Most lenders require an appraisal to determine the property’s market value before approving financing.
- Home Inspection: Buyers pay for their own home inspection and may also choose specialized inspections, such as termite, mold, wind mitigation, or other property-specific inspections.
- Title Services: Buyers may be responsible for the lender’s title insurance policy, title-related services, and certain title endorsements. Lender’s title insurance is required when financing a purchase.
- Recording Fees: Fees are charged to record the buyer’s deed, mortgage, and other documents in the public records.
- Mortgage Taxes: Florida imposes documentary stamp tax on certain mortgage documents.
- Prepaid Expenses and Escrow: Buyers may need to prepay homeowners’ insurance, property taxes, mortgage interest, and establish an initial escrow account.
- Survey and Association fees: Depending on the property, buyers may pay for a survey, condominium or homeowners association application fees, transfer fees, or other property-specific expenses.
- Attorney Fees: It is recommended that you retain a lawyer to guide you through the real estate transaction process.
Before closing, buyers should carefully review their Closing Disclosure and compare the figures with their loan estimate. The Closing Disclosure provides an itemized breakdown of closing costs and the total amount of cash required to close.
Florida real estate transactions can involve substantial sums and numerous legal documents, so it is beneficial to consult with a qualified real estate attorney that can help buyers understand their obligations and identify potential issues before closing.
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 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
(561) 582-5670