Buyer’s Side Purchase Closing Costs

When buying a property in Florida, whether it is near Disney World, Orlando, Clermont, Kissimmee, you name it, there will be closing costs for the buyer and the seller; each party usually pays their respective fees unless agreed otherwise during contract negotiations.

Here is a list of possible costs associated with a property purchase in Florida as of January 2014.

General Fees:

• Title Search: $200 to $250 (Can also be paid by seller)
• Appraisal (Price Evaluation): Between $250 and $350 depending on company.
• Settlement (Closing) Fee: Between $250 and $400.
• Inspection (Home Evaluation for defects): Between $300 and $400 depending on property size and inspection company.
• Land Survey: $250 to $300 depending on company.
• Miscellaneous Fees: $400 to $700
• Proration: (Taxes or Home Owners Association Fees Paid By The Sellers In Advance) This will vary widely depending on community and property, but you should expect some debits if the seller has paid in advance, or some credits if the sellers haven’t paid for taxes and HOA fees.
• Initiation fees: If the property is in a country club or if there's a home owners association, initiation fees by these entities could be due. These fees can vary from $500 to $1,500 for association fees, and $5,000 to $20,000 for country clubs.

Borrowing Fees:
(If you are financing the purchase.)

• Loan Processing Fee: $250 to $300 depending on bank.
• Recording Fees: $100 to $200
• State Tax on the Mortgage: .0035 x Loan Amount.
• State Intangible Tax on the Note: .002 x Loan Amount.
• Loan Origination Fee: From 1% to 2% of mortgage amount depending on bank or mortgage broker. If the buyer doesn’t use a mortgage broker then this fee may be lower.

When financing, you also have to budget for prepayments. Prepayments are escrow reserves lenders require in order to grant you a loan. These will vary depending on the lender, but they usually include the following.

Prepayments:

• From 6 to 12 months of home owner’s insurance premium.
• From 3 to 6 months of prepaid mortgage interest.
• From 3 to 6 months of prepaid mortgage insurance.
• From 3 to 6 months of prepaid property taxes.
• Some community associations require you to prepay 3 months in advance of Home Owners Association (HOA) fees. For example, if the community/subdivision has an HOA fee of $200/month they may require an escrow of $600 at closing. All different types of communities have different HOA fees, so this will be clearer once you decide which property to buy.

Paying Cash:

• If you are buying cash, or financing abroad, you don’t have to worry about borrowing fees and prepayments in Florida, although the general closing fees and HOA prepayment will still be required.

Basically, all these fees usually amount to between 4 and 5 percent of your purchase price if you are financing, or between .5 and 2 percent of your purchase price if you are paying cash. Please budget accordingly.

Still need help understanding closings costs for your own particular situation? We’d love to help you clear it up! For more information, complete the form below or call us at 407-910-2553 or 1800-383-8455. We are ready to help you with your real estate needs!

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