The Seller´s Guide To Closing Costs in Florida

The Seller´s Guide To Closing Costs in Florida

The Seller’s Guide to Closing Costs in Florida

When buying or selling a home in Florida, you need to be aware of how much the transaction will cost. You have to consider costs that are not accounted for in the listing/sale price. The expenses include closing costs. Closing costs are extra expenses such as commission fees, transaction costs, and taxes that must be paid before closure. The buyer and seller can share the expenses. Keep reading to learn more about closing costs in Florida.

How Much Are Closing Costs in Florida?

If you are interested in getting a rough estimate of your future closing costs in Florida, homebuyers spend an average of 2.58% of the purchase price. The average home in Florida sells for $225,000, so at 2.58%, you’ll owe $5,800 (approximately) in closing costs.

In major cities, you can expect higher costs – Tampa’s average home sells for $323,000, so you would owe around $8,300. (1) So closing costs vary with location and the one buying your property. For instance, if you sell your house as-is for cash to a we buy houses Tampa FL company, you may not likely pay closing costs. Reputable cash home buyers take care of the closing costs so you can get a fair price for the home.

However, if you sell through an agency, you will likely pay a huge portion of closing costs which include commission fees, outstanding property taxes, and others. The real estate commission fee is the largest portion of the closing cost a seller will incur. The commission can be around 6% of the sale price. So if your house sale price is $500,000, expect to part with around $30,000 in commission. But you can avoid the traditional route and sell your house directly to one of the best Tampa home buyers. When you do that, you will save commission fees that you could have paid to the agency.

If you are a buyer, you should be ready to pay closing costs, including property appraisal settlement, land surveys, home inspection, lender fees, and lawyer fees. If you are buying a house through an agency, you should also get ready to pay a commission to the agency you hire to help you look for a home to buy.

Who Pays for Closing Costs in Florida?

Both the seller and the buyer pay closing cost in Florida. Each party is responsible for different costs, as explained below:

Closing Costs for Sellers

Most sellers focus on the sale price and forget other expenses that are involved in selling a house. The expenses will shrink the proceeds one will get when they sell their houses to we buy houses Tampa companies or other interested buyers. Here are common closing costs sellers have to pay:

Commission Fees – If you sell your home the traditional way through an agent, you will have to pay a commission which can be around 6% of the sale price. However, you will not pay agent fees if you sell your house independently to a cash home buyer.

Documentary Stamp Taxes/Transfer Taxes– The seller can also pay documentary stamp tax, commonly known as transfer taxes in other jurisdictions. This amount is calculated by dividing the selling price by 100 and then multiplying the answer by 0.7. So if your home selling price is $400,000, the amount will be $2,800.

Outstanding Property Taxes – If you have unpaid real estate taxes, you must clear the taxes before selling the house. But some cash Tampa home buyers can pay the taxes on your behalf and deduct that from the sale price.

Pay Existing mortgage – If you have an unpaid mortgage, you need to pay it before the transfer of ownership. But if your mortgage is assumable and the buyer accepts to assume it, you may not have to clear it.

Pre-Listing Inspection Fees –If you want to inspect the house and fix it before listing, you must pay an inspection fee of around $341.

Concessions – If the buyer inspection team identifies issues in your property that need to be fixed, get ready to fix the issues out of pocket or deduct a portion from the sale price to fix the problems.

Homeowners Association Dues – If your home is part of an HOA, you have to pay your dues.

Lawyer fees – Although sellers in Florida are not legally required to hire attorneys during transactions, it is vital to have a lawyer on your side to protect your interests. You will pay the legal fees, and the amount will depend on the lawyer you hire. 

Closing Costs for Buyers

You might think that a down payment is the only upfront expense you have to deal with when buying a home. But that is not true. Here are other closing costs you have to deal with:

Lender fees – If you need financing to buy the house, you need to pay an original fee of 1% of the loan as lender fees. For example, if you get a mortgage loan of $400,000, be ready to pay $4,000 at closing.

Appraisal – Home appraisal is vital to verify if the house you intend to buy is worth the price. Depending on the house’s location and size, you will pay approximately $500 for appraisal.

Home Inspection – You must hire a professional home inspector to inspect the house. You will pay around $341 for the inspection.

Insurance and Property Tax Escrow – You’ll be required to pay a portion of homeowners insurance property taxes upfront. The amount will vary.

Others – recording fees ($50-250), credit report ($50-$75), survey fees costing around $200-$800 depending on the land size (but there is a way you can get it for free), and wood destroying organism inspection which will cost from around $75 to $300.

Lowering Closing Costs in Florida

You can lower closing costs depending on your negotiation powers. For instance, if you have a property many Tampa home buyers are interested in, you can tell the winning buyer to cover all or part of the closing costs. You can also sell the house for cash without an agent, and you will save the commission fee. Alternatively, you can sell the house to one of the best rated we buy houses cash Tampa companies, and they will likely take care of all or a portion of the closing costs.

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