Closing Costs in Florida

Closing costs are the various fees and expenses associated with finalizing a real estate transaction in the state of Florida. These costs typically arise during the closing process, when ownership of the property is formally transferred from the seller to the buyer. In Florida, closing costs can encompass a wide range of charges, including but not limited to loan origination fees, title insurance, appraisal fees, property taxes, and recording fees. Both buyers and sellers may incur different types of closing costs, and the exact amounts can vary based on the property's value, location, and the specifics of the sale agreement. Understanding these costs is crucial for both parties to ensure a smooth and transparent transaction, free from unexpected financial surprises.

Closing costs in the state of Florida refer to the various fees and expenses associated with the finalization of a real estate transaction. These costs encompass a range of charges that both buyers and sellers must address when transferring property ownership. Common components of closing costs in Florida include title insurance, appraisal fees, attorney fees, escrow fees, and government recording fees. Additionally, Florida's unique real estate market, local regulations, and customary practices can influence the exact amount and distribution of these expenses. Understanding these costs is crucial for prospective buyers and sellers to effectively budget and negotiate during the property transfer process.

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Closing Costs To Be Paid By Seller
Documentary stamp taxes and surtax on deed, if any

Documentary stamp tax is an excise tax imposed on certain documents executed, delivered, or recorded in Florida. The most common examples are:

  • Documents that transfer an interest in Florida real property, such as deeds; and
  • Written obligations to pay money, such as promissory notes, and recorded mortgages.

Tax is paid to the county clerk of court or a recording official when the document is recorded. When a taxable document is not recorded, the tax must be paid directly to the Florida Department of Revenue.

Reference: Chapter 201, Florida Statutes (F.S.)

n all Florida counties except Miami-Dade, the tax rate imposed on documents subject to tax is 70 cents on each $100 or portion thereof of the total consideration.

Reference: Section 201.02(1)(a), F.S.

The tax rate for Miami-Dade County is 60 cents on each $100, or portion thereof, of the total consideration. Miami-Dade County also has a surtax of 45 cents on each $100, or portion thereof, of the total consideration. The surtax is not due on a document that transfers only a single-family dwelling.

Reference: Section 201.031, F.S.

click for more details from the State of Florida Revenue Department

estimated $0.70 of each $100 of Sales Price
FIRPTA

Charges for FIRPTA withholding and reporting

The Foreign Investment in Real Property Tax Act (FIRPTA) is a U.S. tax law designed to ensure that foreign investors pay income tax on the sale of U.S. real estate. Enacted in 1980, FIRPTA mandates that buyers of real property from foreign sellers withhold a percentage of the gross sales price and remit it to the Internal Revenue Service (IRS). This withholding serves as a prepayment on the foreign seller's U.S. tax obligation.

Under FIRPTA, the standard withholding rate is typically 15% of the property's sale price. However, there are exceptions and variations based on specific conditions, such as the property's sale price and the buyer's intended use of the property. For example, if the buyer intends to use the property as a residence and the sale price does not exceed $300,000, the withholding rate may be reduced or waived entirely.

FIRPTA aims to address the challenge of collecting taxes from foreign entities who might not otherwise be subject to U.S. tax laws. By requiring withholding at the time of sale, the IRS ensures that it collects at least a portion of the tax owed before the seller potentially leaves the U.S. tax jurisdiction. This law plays a critical role in regulating and taxing foreign investments in U.S. real estate, contributing to the fairness and integrity of the tax system.

15% if applicable
Municipal Lien search

(if Paragraph 9(c)(iii) is check)

A Municipal Lien Search in Florida is an important aspect of real estate transactions. It involves checking for any outstanding debts or obligations related to a property, such as unpaid utility bills, code enforcement violations, open or expired permits, and property taxes. This search ensures that any municipal liens are identified and addressed before the property sale is finalized, protecting the buyer from inheriting unforeseen liabilities. Conducting a Municipal Lien Search is crucial for a clear title transfer and a smooth closing process in Florida real estate transactions.

based on location - up to $350 
Owner's Policy and Charge

(if Paragraph 9(c)(i) is check)

An Owner's Policy of title insurance in Florida protects the buyer of a property against potential title defects, such as liens, encumbrances, or legal claims to the property that were not uncovered during the title search. This policy provides financial protection and peace of mind, ensuring that the buyer has clear ownership of the property. The charge for this policy is typically a one-time premium paid at closing, and it is based on the property's purchase price. This cost can vary, but it is an essential investment for safeguarding the buyer's ownership rights.

In Florida, the cost of owner's title insurance is regulated by the state and is based on the property's purchase price. The premium is calculated using a standard rate schedule. As of my knowledge cutoff in 2023, the rates are approximately as follows:

  • For the first $100,000 of the purchase price, the rate is $5.75 per $1,000 of coverage.
  • For amounts over $100,000 and up to $1 million, the rate is $5.00 per $1,000 of coverage.
  • For amounts over $1 million and up to $5 million, the rate is $2.50 per $1,000 of coverage.
  • For amounts over $5 million and up to $10 million, the rate is $2.25 per $1,000 of coverage.
  • For amounts over $10 million, the rate is $2.00 per $1,000 of coverage.

For example, if you purchase a property for $300,000, the owner's title insurance premium would be calculated as follows:

  • $5.75 per $1,000 for the first $100,000: $575
  • $5.00 per $1,000 for the remaining $200,000: $1,000

Total premium: $575 + $1,000 = $1,575

These rates can be subject to change, and it's always advisable to consult with a title insurance provider or a real estate professional for the most current rates and any potential discounts.

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Title search charges

(if Paragraph 9(c)(iii) is check)

Title search charges in Florida pertain to the fees associated with examining public records to verify a property's legal ownership and to identify any liens, encumbrances, or other issues that could affect the title. This search is a critical step in the real estate transaction process, ensuring that the title is clear for transfer to the buyer. The costs for a title search can vary depending on the complexity of the search and the specific title company, but they are typically a necessary part of closing costs in a real estate sale.

If applicable
HOA / Condominium Association Estoppel Fee

The state of Florida generally caps the estoppel fee at $250. According to Florida Statute 718.116(8), the maximum estoppel fee that can be charged is $250 if no delinquent amounts are owed. However, there are circumstances where this fee can be higher that's why on our estimate we go Higher.

Here are situations where the fee can be $250 to the HOA for Estoppel plus additional fees 

  1. If the request is made on an expedited basis, an additional $100 can be added, making the total $350.
  2. If there are delinquent amounts owed, an additional fee not to exceed $150 can be added, bringing the total possible fee to $500.
  3. Third-party HOA vendor fees for facilitating the estoppel on behalf of the HOA
$250 - $400 if applicable
Recoding and other fees needed to cure title

Recording fees and other fees to cure title in Florida are costs incurred to resolve any issues that affect the clear transfer of property ownership. Recording fees are paid to the county to officially document the change in property ownership and any other pertinent documents, such as deeds or mortgages, in public records. Other fees to cure title may include costs for resolving liens, correcting errors in the title, or addressing boundary disputes. These fees ensure that the title is clear and marketable, providing legal assurance of ownership to the buyer.

as needed
Seller Attorneys' Fees

If the seller has used an attorney's service during the closing transaction, this fee may be paid at time of closing based on the agreement between the seller and their attorney. In Florida real estate transactions, the closing process is typically managed by a title company. In some cases, the closing can also be managed by an attorney who specializes in real estate transactions.

as needed
Real Estate Agent Compensation To Represent The Seller

Seller agent compensation, also known as the listing agent's commission, is paid by the seller to the real estate agent who represents them in the sale of their property. This fee, typically a percentage of the final sale price, compensates the agent for their expertise, marketing efforts, and the various services they provide throughout the selling process. These services include pricing the home, listing it on the market, conducting showings, negotiating with buyers, and managing the transaction until closing. By paying the seller agent's compensation, sellers benefit from professional guidance and resources that can lead to a faster, more profitable sale.

priced per contract
Buyer Agent Compensation 

Buyer agent compensation paid by the seller is a common practice in real estate transactions, where the seller agrees to cover the commission for the agent representing the buyer. This arrangement helps attract more buyers, as it alleviates the financial burden on them, making the property more appealing. It also ensures that buyer's agents are motivated to show the property to their clients, potentially leading to a quicker and smoother sale. By covering this cost, the seller may benefit from a broader pool of interested buyers and a more competitive offer, ultimately enhancing the overall transaction process. This fee is typically a percentage of the final sale price

priced per contract