What are Real Estate Closing Costs
We like to be as upfront and transparent as possible with our customers so there are no surprises when buying or selling your home. The last thing you need is to have a monetary surprise that messes up your home purchase and the wild card in this is what we refer to as "Closing Costs".
"Closing costs" is a catch-all phrase that includes all of the fees that are above the price agreed upon when purchasing a home. This isn't a set number and can vary greatly depending on whether you are buying or selling and whether you are financing the property or paying for it cash. Let me break this down to a Buy side and Sell side for simplicity.
Both Buyer and Seller are responsible for their portion of the Title Company fees, also called escrow fees. This can vary depending on the items mentioned above and the best way to know the breakdown is to talk to the Escrow Officer at the time of the purchase to make sure all fees are understood. This is the traditional breakdown for Buyer and Seller fees (this information will be on page 3 of the Florida Realtor As-Is Addendum):
-Any lender associated fees for mortgage and note including recording fees for financial documents.
-All loan expenses and appraisal fees.
-All property insurance fees.
-Buyer attorney fees.
-All home inspections including septic inspection if necessary.
-Owner's Policy to insure Title.
-Realtor commissions for both sides.
-Documentary Stamp Taxes and Surtax on Deed.
-Any fees needed to make sure the Title is clear.
-Any back taxes or Home Owner Association (HOA) fees.
-Any Seller attorney fees.
There are also some Closing Costs that are prorated between the Buyer and Seller. These include property taxes and any Home Owner Association Fees and they will be charged to the Seller for the part of the year that they own the home and the Buyer for the future months of the year that they will own the home.
Some of these costs can be negotiated during the Purchase Agreement but this is a pretty inclusive list of what you can expect to pay. Check with your lender to see if they will be able to quote you what their closing costs will include before getting too far into your home search.
So, you may be asking what the number is going to be for closing costs and it will vary greatly on everything listed above. If you are paying cash, it will be a fairly low number in most cases due to many of the closing fees being associated with lender fees. It may be well under $5000 for everything. If you have a lender, it could be closer to $10,000 or even a little more depending on your lender and what fees you choose to pay upfront. These are very rough estimates and should be researched prior to purchasing a property using the numbers in your situation.
As a Seller, the biggest part of your fees are usually the Realtor commissions and this can vary greatly depending on the property. (Feel free to call us if this is your situation and we will be happy to discuss what it will cost and what services you receive for this price). Seller Title fees are usually well under $5000, as well, on a normal sale. Hopefully, this gives you an idea of what to expect. At Team Teichman, we will be happy to discuss your closing costs at no charge to you and help set you up with the right questions to ask the right people.