Image by Freepik
Excitement fills the air as you step closer to obtaining the keys to your long-awaited dream home. But before that, there’s still one more thing to consider.
When it is time to close the deal on the house, the buyer will come across additional expenses besides the agreed-upon price.
These extra costs are known as “closing costs,” which sometimes surprise many buyers and sellers.
In Middle Keys, FL, you’ll need assistance from professionals like a lender, lawyer, appraiser, home inspector, and insurance provider when buying a home.
Rather than paying each separately, all the costs of their services are combined into a single bill.
Regardless if you are a first-time homebuyer or an experienced investor, understanding the closing costs and the factors that influence them is crucial.
This article will cover more about closing costs in Middle Keys, FL, exploring how much are closing costs in Florida overall.
We will also lay out the average expenses, the factors that affect them, the significance of closing documents, and additional costs that might arise during the closing process.
With this knowledge, you can confidently approach your real estate transaction and make informed financial decisions as you move into your forever home in Middle Keys, FL!
Average Closing Costs in Middle Keys, FL
Image by jcomp on Freepik
As you move a step closer to your new home and settle all remaining fees and expenses, you might ask, “How much are closing costs in Florida?”
The average closing costs in Florida, including the Middle Keys, come to approximately 2.3% of the purchase price for an average home price of at least $300,000 to $400,000.
If you purchase a property within this price range, you can pay approximately $6,900 to $9,200 in closing costs before taxes.
These costs cover various expenses, including appraisal fees, settlement, and recording fees, as well as title insurance and flood certification, which are mandatory in the state.
However, note that there might be other expenses that will be added to your closing cost.
To help you prepare financially, here is a list of the typical closing fees a buyer or seller can expect to pay to understand better how much are closing costs in Florida.
Closing Costs for Buyers
Image by Freepik
| Particulars | Description | Cost Range |
|---|---|---|
| Appraisal Fees | The lender might require the buyer to have a professional home appraisal to determine the home's value for loan purposes. | $300 to $500 |
| Lender Fees | When selecting a mortgage lender, carefully considering the origination fee they charge is important as it can significantly impact your overall budget. For instance, on a $400,000 loan, a 1% origination fee will incur an additional $4,000 to the total amount due at the closing. | 1% of loan amount |
| Loan Origination Fees | This fee generally covers associated loan fees, such as prepaid interest, application, and origination fees. | 0.5% to 1.5% of the sales price |
| Insurance and Property Tax Escrow | Buyers will likely make upfront payments towards homeowners insurance and property taxes to ensure sufficient funds for property protection and government payments. | Varies |
| Credit Report Costs | Lenders typically charge a cost to check the credit score and history of the buyer. | $10 to $100 |
| Inspection Fees | Covers the costs of investigating a home before closing the deal. | $300 to $600 |
| Recording Fees | Florida incurs payment for registering the sale and transfer of the property. Typically, a recording fee is remitted to the local city or county government to update public land ownership records. | Approximately $125 |
Closing Cost for Sellers
Image by Freepik
| Particulars | Description | Cost Range |
|---|---|---|
| Commission Fees | An average of 3% commission is paid to the buyer's agent, and 3% goes to the seller. So commission fees would total $24,000 if a seller sold a home for $400,000. | average of 3% agent commission and 3% seller’s commission |
| Outstanding Property Taxes | The seller must settle any outstanding property tax debts before handing over ownership. | Varies |
| Documentary Stamp Taxes | There is no defined rule on who pays Florida's documentary stamp tax or often known as transfer taxes in other states. On average, it is usually around $0.70 for every $100 of value, which amounts to $2,800 on a $400,000 sale. | Approximately $0.70 for every $100 of value |
| Seller Concessions | If the buyer's home inspection reveals any issues with the property, the seller will need to pay a part of the buyer's closing fees, known as seller concessions. Buyers need to negotiate and include seller concessions in their purchase agreement to ensure that they are not left with unexpected expenses during the home-buying process. | Varies |
| Pre-Listing Inspection | Sellers may conduct a pre-listing inspection to determine what needs to be fixed before advertising the home. | Average of $341 |
Factors That Affect Closing Costs in Middle Keys, FL
Image by fabrikasimf on Freepik
Closing costs can vary due to several factors, whether for buyers or sellers in Middle Keys, FL.
One factor, for instance, is the type of loan you secure, which can be a conventional loan, FHA loan, or VA loan. Different loan programs also have varying requirements and associated fees.
Your down payment amount can also affect closing costs, as a larger down payment may reduce specific expenses.
Lenders also consider your credit score when determining the loan terms, which can impact the interest rate and associated costs.
Additionally, the mortgage lender you choose may have specific fees and requirements. So, comparing offers from different lenders is advisable to have many options and understand the full scope of potential closing costs.
Prepaid items, such as property insurance and escrow accounts, can also contribute to closing costs. These expenses cover future insurance and property taxes payments, typically held in an escrow account to ensure they are paid on time.
Getting a trusted real estate agent and consulting them with the lender will help you understand how these factors may affect your closing costs.
Understanding Closing Documents
Image by Freepik
As a buyer or seller in Middle Keys, FL, it is important to familiarize yourself not only with how much are closing costs in Florida but also with the required closing documents.
Here is a brief rundown of some of the most typical real estate closing documents you can expect to see.
Understanding these documents and seeking guidance from a professional real estate agent can help you confidently navigate the closing process and ensure a legally sound transaction.
| Closing Document | Description/Purpose |
|---|---|
| Closing Disclosure | It outlines the final loan terms, including the interest rate, recurring monthly payments, and total closing costs. It is provided to the buyer at least three days before the closing date, allowing time for review and clarification. |
| Promissory Note | It is a legal document indicating the borrower's promise to repay the loan, including information like interest rate, loan amount, repayment schedule, and any applicable penalties or fees. |
| Loan Application | It is an application form to be submitted to the lender for consideration. It provides the lender with information regarding the buyer's financial situation, which helps the lender evaluate the buyer's eligibility for the loan. |
| The Deed | The Deed documents transfer property ownership from the seller to the buyer and include the property's legal description. It is recorded in the county or municipal records to establish the buyer's ownership rights. |
| Proof of Homeowners Insurance | Before finalizing the purchase, the buyer must provide proof of homeowner's insurance for the property to the mortgage lender after signing the purchase agreement. Most lenders insist that the insurance documents include a mortgage clause stating that the lender has an interest in the property. Lenders will also usually request proof that you have paid the insurance premiums for a certain period, sometimes a few months to a year, beforehand. |
| Mortgage | The mortgage is the agreement between the buyer, the borrower, and the lender. This agreement involves using the home as collateral for the loan the buyer received. If the buyer doesn't repay the loan on time, the lender will foreclose the property and take over its possession. |
Conclusion
Understanding the complexities of closing costs is essential when purchasing or selling a property in Middle Keys, FL, as it includes various expenses and can have a significant financial impact.
By familiarizing yourself with closing costs, you can have an idea and estimate the additional expenses involved.
However, note that numerous factors influence closing costs, including the type of loan, down payment amount, credit score, and the chosen mortgage lender.
It is also equally important to familiarize yourself with the relevant closing documents, such as the closing disclosure, promissory note, loan application, deed, proof of homeowners insurance, and mortgage note.
By understanding these documents, you can ensure you are fully informed and prepared for the closing process.
Equipping yourself with knowledge about closing costs and the associated factors can help you confidently transact any real estate transaction in Middle Keys, FL.
If you are looking for a dependable and trustworthy realtor in the area to assist you with the overall closing process, look no further!
I am confident I can provide the relevant expertise and guidance you need to ensure a smooth and successful closing. I can also help you with other real estate concerns you may have.
Please feel free to call me at 305-912-2177, email me at tracy@thebeautifulkeys.com or connect with me through my Facebook page so we can schedule an appointment and begin your home buying or home selling journey in Middle Keys, FL!
Image by snowing on Freepik
Frequently Asked Questions
How much are closing costs on a $300000 house in Florida?
The closing costs on a $300,000 home in Florida can vary depending on several factors.
On average, closing costs in Florida are typically about 2.3% of the purchase price. A $300,000 house would amount to approximately $6,900 in closing costs.
Are closing costs in Florida high?
Florida has some of the highest closing costs in the country, at about 2.3% of the transaction price of the home.
Who pays closing costs in Duval County, Florida?
In Duval County, Florida, the responsibility for closing costs is typically negotiable between the buyer and seller.
Certain charges are divided between the parties, but it will depend on the terms agreed upon in the purchase agreement or through negotiations.
Buyers usually cover loan-related fees, appraisal fees, and title insurance premiums.
At the same time, sellers are often responsible for real estate agent commissions and certain taxes.
