Buyer’s closing costs vary depending on type of property and the purchase price. Here is a breakdown of the typical buyer’s closing costs in Florida.
*FYI. Financing a purchase with a mortgage will incur more closing costs than paying cash. (see lower sections, “Additional Closing Costs for Financed Real Estate” ).
*Closing Costs for a Cash Buyer in Florida
Closing Fee: This is a common fee paid to the Title Company or Attorney to close the transaction. A closing fee on a cash deal in N. Central Florida will run between $300 to $500 depending on complexity of the transaction. The closing fee can be negotiated with your closing agent.
Title Search: A history of mortgages, notes and liens, unpaid taxes, easements, mineral rights and open permits. Initial title search runs between $85-$200.
Owner’s Title Policy: A cash buyer isn’t required to purchase title insurance, however, it is highly advised. A title policy is a one- time fee that protects you from any missed liens, outstanding judgments or unpaid mortgages. The owners title fee varies but generally runs about a 1/2 of 1% of the purchase price. This cost can be negotiated with the Seller as to who pays.
Survey: When paying cash a survey is not required, but highly advised. To save money you may be able to obtain a copy of the seller’s previous survey. However, if there has been any changes, new buildings, fences or neighboring property encroachments since the last survey, you won’t be protected. A survey for a home in a neighborhood typically runs between $400-$600. A Vacant land survey with acreage usually starts at $1000 and goes up depending on the size of the tract .
Appraisal: Not required for cash purchases, but not a bad idea, especially for unique properties that are difficult to evaluate based on recent sales. Cost $400 to $600
Recording Fees: This is a fee to record your deed in the public records. The average cost for a cash buyer in Florida is between $18-$30.
*Additional Closing Costs for Financed Real Estate
Include all of the above mentioned costs with the following
Credit Report: When you apply for a mortgage, the lender will collect a fee to pull credit reports (from multiple agencies). The average cost is around $100-$200.
Appraisal: The lender needs to make sure that the property is worth the value of the loan. An appraisal on a conventional mortgage will run around $400-$600. An FHA or VA appraisal can be slightly higher.
Loan Origination Fee or Points: A service fee charged to a buyer by the mortgage lender. This fee ranges between 1/2 % to 1% of the loan amount.
Documentary Stamp and Intangible Tax: In Florida when one obtains a mortgage to fund a real estate purchase, documentary stamp tax and intangible tax is due on the note and mortgage. The stamp tax is $.35 per $100, the intangible tax is $.20 per hundred of the debt that will be recorded. Example, if your mortgage is $100,000, you would be paying $350 in doc stamps and $200 intangible tax at closing.
Title Endorsements: Address items such as mineral rights, encroachments, planned unit development, condo, ect.. Endorsements cover anything that could negatively impact a clear title to the property. The average fee for a title endorsement is approximately $100-$200 each.
FHA and VA Buyer’s Closing Costs
FHA or VA loans have additional fees that are not typical to conventionally financed loans.
VA Funding Fee: (As of 1/1/20) Percentage varies from 1.65% to 3.6% of loan amount depending on how much money you are putting towards a down payment (if any), and whether you have used your VA benefit in the past. This fee can be financed or paid in cash at closing. You may be entitled to a funding fee exemption if you suffered an injury while in service. Check with your mortgage lender.
FHA Funding Fee: FHA charges a funding fee. The fee is currently 1.75% of your loan amount.
Pest Inspection: With an FHA, VA or USDA loan, your lender will require a clean pest inspection. This inspection is checking for wood destroying organisms, wood rot and live termites. The fee is usually $100 to $200.
Water Test: If your property is served by a private water well, FHA will require a test showing the water clear of bacteria. The cost can range from $100 to $200.
Optional Buyer Inspections
Other Inspections that you may want to consider as part of your due diligence process.
Home Inspection (Highly recommended) The cost of a detailed home inspection is between $400 and $600. A Wind Mitigation inspection can be included for an extra cost.
Environmental Study (Usually applies to land) A phase 1 environmental inspection identifies potential environmental contamination. Can cost $1000 to $5000 depending complexity.
Soil Tests: Samples of soil are tested to determine building locations, feasibility and future foundation settling issues. Cost $400 to $1000.
These are the most common costs that the buyer can expect from the typical real estate closing. However, each transaction is unique. Please consult your lender, title company and/or Attorney for the exact costs involved.
Navigating the closing cost jungle can seem complex. We can help. Reach out to us for a free closing cost estimate based on your particular situation.
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