Looking At A Seller's Closing Costs
A closing cost statement is an itemization of the charges involved in a real estate transaction and which party is responsible for the charges. Real estate attorneys say that list of the USUAL fees and costs can include up to twenty items, no matter which side of the deal your own. Remember, not every fee will apply to your sale, and the actual fee may be higher or lower depending on your specific situation:
- Doc stamps – State doc stamps are typically paid by the seller. The normal costs are .70 per thousand dollars of the sale price. A $200,000 sale would result in a $1400.00 charge to seller.
- Title Insurance - Florida is a title insurance state, rather than an Abstract and attorney’s opinion state. Some isolated areas of Florida still use the abstract method (South Florida). Title insurance is like any other insurance, with the exception, title insurance covers past events rather than future events. Owner’s title insurance insures marketable title, which means that there are no outstanding judgments, mortgages, liens, interests or taxes. When financing your property, mortgagee title insurance will be a requirement of your lender. The mortgagee policy insures that the lender’s lien is (usually) in first position, that the property is owned by the correct parties and has no exceptions that would interfere with their lien. The cost of title insurance is based on the purchase price or mortgage amount, whichever is greater. Title insurance can be issued at any time, but closings can not take place (if your property is financed) when homeowners insurance is not bound. Homeowners insurance is generally cut off when a tropical storm enters the Gulf of Mexico. Estimated cost for title insurance is $7.00 per $1,000.00.
- Recording fees – recorded release of the mortgage $20 per transaction
- Real Estate Fee – Real estate commissions range from 5-8% for a residential home. The difference is in the quality and degree of service, market conditions, and the cooperation of the seller. Today, marketing a home has become merchandising of a property with the level of sophistication of buyers. If you just want it listed in the realtor Multiple Listing Service and add run in the paper once a month, a discount broker might be what you need. Some discount brokers offer lesser fees, but you will get what you pay for in terms of pricing advice, representation, protection, marketing, and showings. All of your brokerage listing commission may not go to the listing broker if another broker brings the buyer.
- Home Inspections – Sometime sellers hire a home inspector to review the property prior to the sale to identify potential problems. Expect a cost of $350.00.
- Taxes - Seller may receive a credit if you have already paid the taxes for the year. Taxes are pro-rated to the day of closing and the appropriate amount paid by buyer and seller.
- Condo and association fees – The fees are also pro-rated and the respective amounts charged to the buyer and seller.
- Mortgage pay off – If the seller has an outstanding mortgages (s) on the property, the amount and interest will be pro-rated and paid to the day of closing.
- Liens and judgments – All liens and judgments recorded at the courthouse will be paid at closing. Some of these include IRS, county taxes and/or participative paving, enforcement code citations, condo special assessments or judgments.
- Administrative fees – Fees charged by real estate offices for the processing of transactions and required record retention periods. Typically $200 or less.
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