Buyer's Closing Costs in Florida

What are Buyer’s Closing Costs in Florida?

Buying a property in Florida has its share of complexities, but understanding the closing costs involved with your Florida purchase doesn’t have to be complicated.

Regardless of whether the transaction involves the purchase of a primary resident, rental property, or an oceanfront condo, it is crucial to get an estimate of your closing costs upfront. Below we discuss the typical closing costs for a property purchase in Florida.

Closing Costs in Florida Real Estate – An Overview 

Generally, buyer’s closing costs in Florida can vary depending on the type of real property involved in the transaction and the purchase price. The higher the purchase price and loan amount, the higher the costs tend to be. This is because certain fees, such as title insurance and intangible taxes on a mortgage, are based on the purchase price and loan amount. Buyers who pay cash typically have lower closing costs because they do not have to pay lender-related fees.

Buyers who obtain a mortgage loan to pay for a property will have the below additional costs.  

Lender’s Title Insurance

Buyers who obtain financing must pay for a lender’s title insurance policy, which serves to protect the lender’s first position mortgage lien on the property (or second position lien for second mortgage lenders). In Florida, title insurance rates are set by the State of Florida and are based on a formula that the State has created.

Additional lender-related fees include:

• Credit report fee – Required to check the borrower’s credit history
  (typically around $25-$50)
• Appraisal fee – An upfront fee paid to an expert appraisal company
  ($350 and up)
• Application fee – Required to cover the costs of opening a new loan file
  (typically ranges from $100 to $400)
• Loaning origination fee – This is a fee charged to process the loan
  (typically around 0.5% to 1.5% of the loan amount)
• Underwriting fee – Used to pay loan underwriters for their services 
  (approximately $400 to $900)

Closing Fee 

The closing fee is paid to the title company responsible for the closing process. It includes the fee to hold escrow deposit, conduct the lien and title searches, and handle the closing. Closing fees typically do not exceed $1000.

Survey Costs 

A property survey is obtained to confirm the boundary lines of a property in Florida, as well as its legal description. Also, it is used to determine whether there are any encroachments that impact the property.

A survey can be obtained at any time to confirm the boundaries of the property and to check for encroachments and access. However, the best approach is to proceed with a survey before the closing, especially because title insurance does not provide coverage for boundary disputes. 

Buyers who are paying all cash are not required to obtain a survey of the property. Yet, it is recommended to do so before the closing takes place. A standard survey typically costs between $350 and $500. 

Title Search Costs 

A title search is an in-depth examination of the property’s history to find any defects that may negatively impact the title (i.e., ownership) of a property. Typically, a title search will search for issues such as liens, judgments, unpaid taxes, open permits, mortgages, past due condo or homeowners’ association fees, etc. Title search fees are typically around $200. 

Recording Fees & Mortgage Taxes 

Recording fees for the mortgage and deed are typically paid for by the buyer. They generally do not exceed $300.
Mortgage taxes are paid to the State of Florida. The State imposes two separate taxes on a mortgage that is secured by real estate in Florida: a documentary stamp tax at the rate of $0.35 per $100.00 (rounded up to the nearest $100.00) of the loan amount, and an intangible tax at the rate of $2.00 per $1,000.00 of the secured amount.

Owner’s Title Insurance Policy

Even though buyers who pay all cash when purchasing a property in Florida are not required to purchase a title insurance policy, it is still highly recommended to purchase one.

Title insurance is a one-time premium paid at closing but provides title coverage for as long as the owner owns the property. Undiscovered title issues that arose in the past such as forged deeds, missing powers of attorney, unpaid judgements, or unknown heir or creditor claims will be covered should they arise after the buyer takes ownership, as well as the cost to defend these claims. 

Do You Need and Estimate of Your Buyer’s Closing Costs in Florida? – Work with Marina Title 

The best way to anticipate all buyer’s closing costs in Florida is to get an estimate that is tailored to your property purchase. Contact us by calling (800) 604-1871 or email us at [email protected] for a free closing estimate. We provide title, escrow and closing services throughout the State of Florida.