|
Getting your Trinity Audio player ready...
|
The purchase and sale of a property in Florida follows a process in which a deed is passed to the name of the new owner on the day of the closing, which we call “Closing Day”. The deed and other details of the completion of the purchase and sale process are made in the so-called Title Companies. Title Company is a kind of real estate registry office. It is the institution responsible for verifying the records of securities (deeds) of the properties.
In this article we explain in detail all the costs associated with Closing. Keep reading!
What are the costs involved in the closing (Closing Costs)?
If the purchase of the property in Florida is made in cash, the costs of deed transfer and other fees usually total approximately 2% of the value of the property. If the purchase is through, financing with a bank, this percentage rises to about 6% of the value of the property (adding all costs). In the case of financing, what makes it more expensive are the fees charged by the bank that finances and also the fees of the Mortgage Broker (professional who carries out the entire procedure with the banks for credit approval).
Therefore, if you have purchased a property of US$ 300,000 (three hundred thousand dollars), your total closing cost would be between $ 6,000 and $ 15,000.
Many of the fees involved in Closing are optional. For example, you probably want to know if the purchased property is in order, without hidden defects and with good structural conditions. For this there are specialized inspection companies to carry out this type of verification, which incurs additional costs. This service is highly recommended in the case of used properties.
There are other fees that make up the Closing Costs and many of them are negotiable. Some are completely unnecessary. That’s why it’s important to be advised by an experienced real estate broker in Florida.
Closing Costs vary according to where you live, the property you buy and the type of loan chosen. Here is a list of fees that make the total closing costs:
Registration fee (Application Fee)
This fee covers the cost for the lender (bank that will lend the money) to process your application and includes items such as a credit check for your score or credit score. Not all banks charge this fee and it can be negotiated. Approximate value: $ 500
Property valuation (Appraisal)
Fee paid to the evaluation company to confirm the fair market value of the property. The value depends on the size of the property: Approximate value: $500
Lawyer’s fee (optional)
Fee paid for a lawyer to review the closing documents on behalf of the buyer or creditor. This fee is optional. At AMG Realty we work with partner lawyers who usually charge approximately $900 to represent the buyer.
Closing Costs Fee or custody fee (Closing Fee)
Pay the title company, custody company or lawyer to conduct the closing process. These agents oversee the entire process as independent participants. Approximate value: $ 700
Mail fee (optional)
Covers the cost of sending the documents to complete the financing transaction as soon as possible. Approximate value: $ 50
Credit Report – Only for individuals who receive income in the US and file an IRS declaration in the US
This is a multiple merge credit report to get your history and credit score. Your credit score plays an important role in determining the interest rate of your financing. It only applies to individuals who receive income in the US and file the U.S. IRS declaration annually. Approximate value: $ 150
Security deposit for property taxes and mortgage insurance
You are often asked to deposit two months of property taxes and mortgage insurance payments at closing. The value varies according to the location and size of the property.
Flood determination of loan coverage
It is paid to third parties to determine if the property is located in a flood zone. If the property is located within a flood zone, you will need to purchase flood insurance. The value of this insurance, obviously, is also charged separately.
Residential inspection
You will probably do your own residential inspection to check the condition of a property and check for any household repairs needed before closing. This value depends on the size of the property, but varies between $275 and $1,000.
Homeowners Association Transfer Fees
The seller will pay for this transfer, which will show that the fees are paid on time, what the fees are, a copy of the financial statements, minutes and notices of the condominium. The buyer should review these documents to determine if the Association has sufficient reserves to avoid future special assessments, legal actions or any other items that may be a cause for concern. The statutes, rules and regulations of the Association will also be included.
Property Insurance
It covers possible damage to your home. Your first year’s insurance is usually paid at closing. The value depends on the size of the property. For a 1614sqft apartment, the approximate value is $1,200.00 / year.
Creditor’s policy title insurance
It is an insurance to assure the creditor that you are the owner of the house and the lender’s mortgage is a valid guarantee. This insurance protects the creditor if there is any problem with the property title. It is similar to the title search, but always a separate line item.
Discount points for loans
“Points” are prepaid interest. One point is one percent of the amount of your loan. This is a fixed payment that reduces your monthly payment during the life of your loan.
Owner’s policy title insurance
This is an insurance policy that protects you in case someone disputes your property.Learn more in the article about Title Companies.
Origination Rate
Covers the creditor’s administrative costs. It usually represents about 1% of the total loan.
Prepaid interest
Most creditors will ask you to pay in advance any interest accrued between the closing and the date of your first mortgage payment.
Property tax
Normally, creditors want taxes due within 60 days of purchase by the loan provider to be paid at closing. The value of the annual property tax of a property is approximately 1.8% of the value of the property.
Recording Fees
A fee charged by the local recording office, usually city or municipality, for recording public land records. Approximate value: $ 50
Research Fee
This fee is applied to a research company to check all property lines and things like shared fences on the property. This is only necessary in houses, not in apartments. Approximate value: $ 700
Title company title research or examination fee
This fee is paid to the title company for doing a complete search on property records. Title Compány researches the deed of your new home, ensuring that no one else has the right to the property.
Transfer Taxes
This is the tax paid when the title passes from the seller to the buyer.
About AMG International Realty
AMG International Realty is a global real estate agency specialized in Florida and aimed at the foreign public. If you want to know more about Florida’s real estate market, contact me right now : +1 305 761 2655 (Heloisa Arazi).
