It is highly probable that you are already familiar with the concept of closing costs, yet do you possess a comprehensive understanding of its components? Consider perusing our closing cost “FAQ” in order to obtain additional insights regarding the intricacies of closing costs.
What Are Closing Costs Exactly in Florida?
Closing expenses are the collective charges and levies that have to be fulfilled when you arrive at the ultimate legal procedure. The actual fees that you will have to pay can vary depending on your residential region, but they generally consist of a range of costs and fees, which may include but are not restricted to:
- Notary fees
- Transfer Costs
- Transfer Taxes
- Appraisal Costs
- Inspection Fees
- Origination Fees
- Recordings Fees
- Title Insurance
- Underwriting Fees
- Bank Fees
- Courier Fees
- Wire Transfer Fees
- Liens against the home will need to be paid to clear the title
- Credit Report Fees
- Administrative Fees
- Attorney Fees, If Applicable
- The balance of your mortgage or loans against the home
- Possibly repairs or pest control if this has previously been agreed upon
- COMMISSIONS!
Who’s Paying?
It is noteworthy that while the purchaser may shoulder some of the closing costs, it is customary for the vendor to bear the full brunt of the commission, which can reach upwards of 6% of the final sale price, save for any outstanding mortgage balance. In the realm of closing costs, it is by far the most colossal expense. There is a growing trend in negotiating ancillary expenses during the sale transaction. As a ploy to entice more buyers, vendors are increasingly shouldering the burden of the closing costs.
During the closing process, as a seller, it is incumbent upon you to pay your fair share of the annual property tax that was due up until the date of closing. Additionally, any expenses associated with HOA fees or other community costs should be prorated and settled during the same time.
What Are Seller Subsidies?
The agreed-upon percentage that the seller will pay towards closing costs is subject to negotiation between the buyer and seller. For instance, it may be feasible to offer a sum of $3,000 to subsidize the closing costs, thus mitigating some of the expenses for the buyer. In the grand scheme of things, the disbursement of these incentives is a trifling expense to incite buyers to partake in the proceedings.
Can You Avoid These Costs?
Undoubtedly! Through collaboration with a direct purchaser who will take on all expenses linked to the finalization of the transaction! Since direct purchasers are not brokers, they will not impose a commission upon you. In fact, it is quite common for them to volunteer to take on all expenses, which will allow you to save a considerable amount of money and avoid complications during the settlement process.
Are Repairs Included?
It is a customary practice for buyers and sellers to negotiate the responsibility of repairs. In cases where a property requires apparent mending, sellers typically tend to take care of these before listing their estate on the market. However, if a post-inspection report indicates that further rehabilitation is required, a buyer may request the inclusion of repair terms as a contingency of their offer. These repair terms can be negotiated between the buyer and seller before the finalization of the sale.
During the home buying process, both the buyer and the seller have the option to negotiate on who will be responsible for necessary repairs. If the property is in clear need of repair, the seller will often address these prior to placing the home on the market. However, if a home inspection uncovers further areas of necessary repair, the buyer may propose a contingency that the repairs are made before closing. Ultimately, the buyer and seller must come to an agreement on this matter prior to the closing date.