Home Buyers Closing Costs in Florida

Buyers closing costs in Florida are complex and most home buyers do not anticipate all the various home buying costs.  It is important to understand what fees you are expected to pay. 

Buyers closing costs in Florida

As you think about your perfect Tampa dream home, you need to determine how much money you will need to purchase that home plus your closing costs. Can you afford it?

Tampa, St. Petersburg, and Clearwater real estate values have doubled in the last 6 years.  It’s a great time to buy now in order to avoid future home appreciation.  Figure out what your home buying costs will be first, before making an offer.

How much money do you really need to buy a Tampa Bay home?

You will need money for the down payment for the loan, escrow deposit, home inspections, appraisal, survey, lender costs and closing costs.  Some costs are paid out of your pocket and some can be financed in your loan.

Your down payment and closing costs can be a substantial amount, so keep reading and be prepared. 

What are Home Buying Closing Costs?

Closing costs are fees charged by the lender, title company, and third-party companies for services that are performed to close on the loan and transfer title from the seller to buyer. Closing costs are costs you will incur in addition to the down payment you will need for the loan.

When will I know how much my closing costs are?  

(LE vs. CD vs. Final Closing Statement)

The closing costs are provided at several intervals through the process and may fluctuate by the type of property you are buying or the type of loan you are applying for.   Those charges are fine-tuned until they are finalized for closing with the real figures.  

You can get a preliminary estimate the first time you speak to a mortgage broker.   But the process really starts when you have a contract on a specific property.  

Buyers closing costs in Florida

Loan Estimate (LE): Once you have completed the loan application the mortgage broker is required to provide the loan charges and estimated title and homeowners insurance estimate within 3 days of application.  This will have your “cash to close” estimate which includes your closing costs.

The loan fees cannot change once quoted.  You should work with a trusted mortgage broker that provides the most accurate estimate.  There are mortgage brokers that understate fees because they never bother to contact the title company for accuracy. Others may just redisclose the LE if they missed a loan charge, instead of refunding the borrower which is required by law.  Need a great lender? Call us for some names.

Closing Disclosure (CD):  The Closing Disclosure is a more detailed version of the loan estimate, with actual title fees, homeowners’ insurance, and HOA fees, if applicable. This document must be signed by the borrower within 3 days of closing, so it is issued right before closing.  However, many times this Closing Disclosure is not finalized, so buyers cannot always rely on them.

Final Closing Statement:  This document is called the ALTA statement.  Formerly called a HUD.  Most buyers rely on it as it's typically the most accurate version of the buyer closing costs with the buyers final figure needed to bring to closing.  

As experienced Buyer Brokers, we are typically the last person to see the buyers charges, but the first to catch mistakes: Mistakes can vary, but can include seller charges on buyers’ side, wrong proportions, wrong computations, duplicate charges, or missing charges on the buyer’s side.  

That could also cause a problem for the buyer. It is best to include your buyer agent on all correspondence so that they can catch what may look like a sketchy charge. 

Tip:  It is important to scrutinize your charges throughout the transaction or it could hurt your wallet...  Some buyers think that the State of Florida oversees this process…not so.  Some title companies do not have quality control and many lenders are lax with the rules.

Buyer's Closing Costs in Florida:       

Buyers closing costs in Florida

Lender Fees: 

  • Loan Discount Points
  • Processing Fee
  • Underwriting Fee
  • Prepaid Interest
  • Credit Report
  • Tax Service Fee
  • Appraisal Fee
  • Flood Certificate
  • Escrowed Property Taxes and Homeowners Insurance

Title Charges:

  • Title Company Closing Fees
  • Lenders Title Insurance, if doing a loan
  • Owner Title Insurance & Title Search Fee, Municipal Lien Search, if buyer pays
  • Title Insurance Endorsements

Other Fees:

  • Recording Fees
  • Transfer Tax on Mortgage
  • Intangible Tax, (exempt for credit unions)
  • Wiring Fees
  • Document Storage Fees
  • Attorney Fees
  • Survey Fee
  • Homeowners Insurance
  • Flood Insurance
  • HOA Transfer or Contribution Fees
  • HOA and Property Tax Prorations
  • Buyer Broker Commissions, if not paid by the seller/listing office

Are closing costs negotiable in the home purchase contract?

Yes.  A home buyer can request a seller to pay a portion of their closing costs in an offer as this is negotiable. The seller may or may not agree.  

To attract buyers in this market, it is more common to see sellers offering to pay closing costs or assist with buyer’s discount points so home buyers can better afford to purchase the house.

Closing costs are dictated in a contract. There will be a section of what the buyers are responsible for and a section that the seller is responsible for.  Yes, sellers have their own closing costs too.

Can home buyers' closing costs be included in the loan?

Home buyers can request sellers pay their closing costs in the home purchase offer.  This is usually represented as a percentage of the purchase price or a flat dollar amount.   If the seller agrees, it is possible that the purchase price may be bumped up higher than list price. The seller is still focused on the money they will net from the sale. 

It’s important to work with an experienced Buyer’s Broker that can size up an offer strategy.  There are times when it makes sense to ask for closing costs and there are times where it could hurt a buyer when competing with multiple offers.

Quick estimate for a buyer’s loan closing costs in Florida Buyers closing costs in Florida

During times when a home buyer does not have the available closing costs from their lender, they can do a quick calculation for the ballpark amount.

Conventional loan estimate 3%+ of purchase price.

FHA/VA loan estimate 4%+ of the purchase price

How do closing costs work for New Construction?

Closing costs for new construction is different from purchasing a resale property.   While the closing cost items are the same, the builder requires buyers to pay costs that are normally a sellers charge on resale.  The closing cost for new construction homes is about 4.5-6% of the purchase price.   Some builders are charging a “builders fee”.  This is an extra fee that in some cases pushes the closing costs up to 6%.

How do closing costs work for Cash Purchases?

When you purchase a home with cash the home buyer avoids all the lender charges, prepaids, and lenders' title insurance, so the closing costs are substantially less.  When buying a home on the resale market, the estimate is 1-2% of the purchase price.  For new construction, the estimate is 2-3% of the purchase price.

Buyers benefit by working with an experienced buyer’s broker that understands what costs a buyer incurs based on the contractual terms and also watches out for mistakes.

How do Buyer/Seller proportions work?

When purchasing a home, the buyer is not responsible for all the HOA fees during the year or property taxes for the year.  These are common items that are split between seller and buyer at closing.   

The seller will be responsible for paying both HOA and property taxes up to the closing date.  The buyer is responsible for paying the HOA and Property Taxes from the closing date to the end of the year, for example.

Tip:  Current property taxes are not always available for closing, so last year’s property taxes are used as an estimate.   If the property tax prorations at closing are different from the current tax bill that is issued later,  most contracts, both resale and new construction, allow the buyer and seller to adjust tax prorations after closing.  

NEW COMMISSION CHANGES coming in July 2024

Due to recent litigation with the National Association of Realtors, there will be more focus on home buyers paying the buyer broker commission in the future, instead of the seller or the listing office. 

While this is not widespread at this time, there could be an instance where a buyer broker commission may be included in the offer with the buyer receiving additional closing cost contributions from the seller to cover the buyer broker commission fee.  All loan types allow this, except Veteran Administration (VA) financing.

How we got the buyer $1,500 after closing!

Sometimes the proration difference is too small to bother with or many buyers forget to redo prorations after closing.   But sometimes the amount is worth it…

Recently, we recognized an opportunity for a buyer even before the closed.  In this case, we instructed our buyer client to contact the builder to re-prorate property taxes when the new tax bill was available in 5 months.  Buyers closing costs in Florida

They contacted the builder, re-prorated taxes, and the buyers received a check for over $1,500 almost 5 months after closing. That was a substantial gain for the buyer and we were happy!

It pays to have an experienced buyer’s broker watching out for your best interest. 

After all,  title companies no longer tell buyers about their tax proration rights. We do.

Florida Buyers need an Experienced Buyer Broker to guide them…

Agents at Buyers Broker of Florida only work with home buyers and represent them with UNdivided loyalty. Their expertise goes a long way to keep you from making a costly mistake. You are always best served by having a pro representing only you.

Contact Buyers Broker of Florida for a complimentary phone chat to learn about your best options 727-202-9130.  We look forward to hearing from you!


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