Friday, March 10, 2023 / by Alison Goser
If you're planning on buying or selling a home in Collier County, Florida, it's important to be aware of the various closing costs that are associated with the transaction. Both buyers and sellers will be responsible for paying certain fees and expenses at closing, which can add up quickly and significantly impact the overall cost of the transaction. Keep in mind, your closing costs may vary based on your lender, the size of your loan and whether or not you’re paying cash. This is just a basic guide of additional expenses to think about when buying or selling a home. Closing costs usually fall within 2%-5% of the purchase price.
· Home Inspection: A home inspection is a critical step in the home buying process. It allows the buyer to identify any potential issues with the property and negotiate repairs with the seller. A home inspection can cost anywhere from $300 to $500, depending on the size of the property.
· Appraisal: Lenders will require an appraisal of the property to determine its value and ensure that it's worth the amount being financed. The cost of an appraisal typically ranges from $300 to $800.
· Property survey fee: This is the cost of having a surveyor determine the boundary lines of the property you're purchasing and identify any encroachments or other issues. Typically $400 to $600
· Loan Origination Fees: Lenders charge loan origination fees to cover the costs of processing the mortgage application.
· Prepaid Expenses: Buyers will be responsible for paying certain expenses in advance, including property taxes, homeowner's insurance, flood insurance and mortgage interest. These costs will vary depending on the specifics of the transaction.
· Document Stamp Tax & Intangible Tax: State Documentary Stamp Tax on Promissory Notes is $0.35 per $100 of the promissory note total. State Intangible Tax on New Mortgages is $0.002 per $100 for mortgage taxes.
· Homeowners association transfer fee: This type of fee is only applicable to homes within a planned community that is governed by an HOA. It covers the cost of transferring HOA fees from the seller to the buyer.
· Condo/HOA Approval Fee & Prorated Charges: Buyers will be responsible for paying certain expenses in advance which vary by HOA. Approval Fees are typically $100 to $150.
· Flood Certificate Fee: In Florida, you’ll be charged a flood certification fee to get the government-required document that determines whether the property is located in a flood plain. If the certification says the property is located in a flood zone, you’ll need to purchase flood insurance. Approximately $15 to $20.
Additional Closing Costs may include: Mortgage Insurance (Typically If you’re down payment is less than 20%), Credit Report Fee, Processing & Underwriting Fees, Document Preparation Fee, Settlement and Closing Fees, Recording Fees, and Courier Fees.
Closing Costs for Sellers:
· Owners Title Insurance Premium (if so stated in sales contract):
· Documentary Stamp Tax: Sellers in Florida are required to pay a documentary stamp tax of $0.70 per $100 of the sale price.
· Prorated Property Taxes and Homeowner's Association Fees: Sellers will be responsible for paying a prorated amount of property taxes and homeowner's association fees up to the date of closing.
· Non Ad Valorem Solid Waste Fees
· Payoff Existing Mortgages, Liens, or Assessments
· Condo/HOA Estoppel Fees: fee charged by the homeowners association to the title company in order for them to determine the status of your account. They will determine if you are current and on-track, if you are behind, or if there are any special assessments that are due
· Condo/HOA Prorated Charges: Sellers will be responsible for the time they owned the property up until close
It's essential to note that these fees are not set in stone, and they can vary depending on several factors, including the location of the property, the purchase price of the home, and the type of loan you're getting. As a Florida home buyer or seller, it's important to estimate your closing costs as accurately as possible to avoid any surprises at closing. Your real estate agent, Title Insurance company and Lender can all put together estimated closing cost fees for you.
Understanding the closing costs involved will help you budget and prepare for the total cost of homeownership.
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