Closing costs are part of any real estate transaction in Florida. They encompass various fees and expenses that both buyers and sellers incur during the process of transferring property ownership and will impact the cash a buyer needs to close, as well as the net proceeds a seller will receive in the end. 

Understanding these costs is essential for anyone involved in the real estate market, whether you’re buying or selling a property. While every transaction is different, some of the basics you can expect to see are outlined below.

Buyer’s Closing Costs

• Lender Fees
  This includes charges for loan origination, appraisal, property survey, credit report, and other related services.
• Title Insurance
  Florida requires both a lender’s and an owner’s title insurance policies. These policies protect against any unforeseen issues with the property’s title. The buyer covers the lender’s policy, and the seller pays for the owner’s policy. 
• Mortgage and Deed Recording Fees & Taxes
  There are costs associated with recording the mortgage, deed and other documents with the Clerk of Courts to be entered into the public record.
• Settlement Fees
  These fees paid to the title company for their services to process the transaction and handle the money part of the purchase/sale as a neutral third party. 

Seller’s Closing Costs

• Real Estate Broker Commissions
  This is usually the largest expense for sellers and the rate is negotiated at the time the listing agreement is entered into. This would include any commissions paid to their listing agent and any compensation to a buyer’s agent that was negotiated.
• Settlement Fees
  These fees paid to the title company for their services to process the transaction and handle the money part of the purchase/sale as a neutral third party.
• Title Insurance
  Florida requires both a lender’s and an owner’s title insurance policies. These policies protect against any unforeseen issues with the property’s title. The buyer covers the lender’s policy, and the seller pays for the owner’s policy. 
• Outstanding Liens or Judgments
  In a traditional transaction, seller’s are expected to provide a “clear” title, unencumbered by any liens or other claims to ownership. Therefore, any outstanding debts or liens against the property will need to be settled at or before closing.
• Taxes
  Property taxes are pro-rated and accountability is split between the buyer and seller. The seller, however, pays for the document stamp taxes and any surtaxes on the deed.

Having an accurate estimate of your expected expenses is imperative when you’re planning to buy or sell a property in Florida. Ask your REALTOR and/or your lender for the estimates of these expenses when you start your homebuying or home-selling journey. They both have tools that can provide you with these estimates to avoid surprises down the line.