How Much Will You Pay When You Sell Your Florida Home?
Home Seller Fees: What You Need to Know.
First, here are two things you want to know when selling a home in Florida.
- Seller closing costs vary depending on the area. (The information I'm sharing is based on a transaction in the Kissimmee/Orlando area.)
- In Florida you do not need an attorney to close on a real estate transaction. But you are welcome to hire one.
OK, with that out of the way here is our focus for today.
We are diving into what average closing costs range for, most common closing costs for sellers, who pays for what? and the negotiable and the non-negotiable closing costs. A real-life example of what a settlement statement looks like. And at the end answers to frequently asked questions.
Let's say you are ready to sell your property. As a savvy homeowner you are doing your research to find out what do sellers pay for.
I want to congratulate you for being proactive!
Having a closing cost estimate (or as we call it a Seller's Net sheet) before arriving to the closing table gives you an advantage. You'll know how much to negotiate with buyers (if need be). You can determine if it is a good time to sell. And how much money you will walk away with.
If you are like me, before making a big decision like selling your home. You want to see a physical (or at least a digital) copy of the closing costs breakdown.
This is why when you do a seller consultation with us, we come prepared. We show you a personalized seller's net sheet with real numbers. And even though this is just an estimate we are proud to say we get pretty close to the real numbers.
We also prepare a net sheet for every single offer. So, you can make an informed decision.
In the illustration below you can see the average closing cost range and what closing fees are involved in a traditional sale (minus the emojis not sure they are call emojis but let's just go with it, ok?).
Seller Closing Costs in Kissimmee/Orlando, Florida
Next let's go over each one of the fees.
Owner's Title Insurance
What is that, why pay for it and covers the cost? In the state of Florida the title insurance policy is typically paid by the seller. And it protects the buyer (new owner) from other entities claiming ownership and/or liens against the property from debt owned.
Title Search
Before a title insurance can be issue a title search needs to be done. This process services two purposes:
- A thorough research is done of tax records, previous deeds, and any other transaction linked to the subject property to ensure accuracy.
- It verifies that the seller is the actual owner of the property, and the home can be sold.
Escrow/Title Company Fee
As the seller you have the right to choose the title company you want to work with. But this is not always the case. In Florida if you pay the title insurance you get to pick the title company.
Prorated Property Taxes
In the Settlement fees (another way to say closing costs) you will see property tax collected. How come? you might say, if you already paid the taxes in your monthly mortgage payment.
The closing company will collect a prorated amount of property taxes from Jan 1st until the closing day. There are no ifs or buts, because at the end of the year the new owner is responsible to pay the property tax bill in full.
You must be wondering where did the property tax money go?
Allow me to explain.
When you buy a home, your lender opens an escrow account (reserves account) to pay for your property taxes at the end of the year. So, every month they get your payment they put a portion of the money in the reserves account to pay property taxes.
When you sell and the home transfers ownership the escrow account will be closed, and you will get that money back.
Another way to get your money back is by the lender adjusting the mortgage pay off to account for the money in the reserves account.
Recording Fees
When you sell or buy real estate you have to record the sale and purchase with the local government. This recoding fee will be based on the sale price of the home.
HOA Estoppel Letter Fee
The estoppel outlines any outstanding obligations such as unpaid dues and violations within HOA rules.
Side note: Violations must be corrected, and moneys owned must be paid before you can close on the home.
Real Estate Agent Commission (including buyer's agent commission)
When you hire a Florida real estate agent you typically pay one commission. And that commission is divided between your agent and the buyer's agent. There will be no additional marketing fees for any marketing campaign when we sell your property.
Mortgage Pay-Off: Estimate How Much You'll Owe
This is the amount you owe the bank and as the seller you must pay back the pay-off amount. This information is crucial to determine how much money you will walk away after the sale.
Real Estate Attorney Fee (Optional)
As mentioned at the beginning of the article it is not mandatory to use an attorney to close on a home in Florida. You can safe a little bit of money on attorney fees or hire an attorney, your choice.
Other Seller Fees
The most common example is the seller credit.
The seller credit is commonly used to do any of these things.
-
Pay for Home Repairs
-
Pay for a portion of buyer's closing costs
-
Buy down buyer's mortgage interest rate.
If you are open to giving a credit discuss it with your realtor at the beginning. This way you set a limit (based on your closing costs estimate) of how much seller credit you are going to give.
There you have it; typical fees sellers pay.
Now, as promised here is a real-life settlement statement. By the way this document is called the ALTA settlement statement in real estate jargon.
You might be thinking, that's a long list. Can the buyer pay for some of those? In theory it is possible for a buyer to pay for your fees but in real life this doesn't happen because home buyers have their own closing costs.
Here is a quick break down of what a buyer settlement fees look like:
Buyer Closing Costs in Florida
-
Lender's title insurance
-
HOA fees
-
Lender fees
-
Loan recording fees
-
Appraisal
-
Survey
-
Credit report
-
Underwriting fee
-
Homeowners insurance
-
Down payment
-
Pre-paid
-
Buyer's agent commission
- Home Inspection
The exact closing costs a home buyer will depend on several different factors. For example: The lender's fees, Homeowner's Association, Home Insurance, Taxes, Etc.
As you can see buyers have their own closing costs to cover.
Side note: If you are thinking of selling a home and buying at the same time. Ask your lender to give you an estimate of the buyers closing costs. This way you know if have enough money for your next home closing costs with the sale of your current home.
So, is it possible for you to save money in closing costs? it is, but you need to know which fees and negotiables and which ones are aren't.
Lower Your Closing Costs: The Negotiables and non-negotiables Fees.
The moment you have been waiting for! How can you save some money?
Here are some examples:
Negotiable:
Real Estate commissions
Title company (escrow company) fee
Owner's title insurance
Non-Negotiable:
Real estate transfer taxes
Unpaid property taxes
Prepayment penalty (if it applies)
You might be tempted to negotiate heavily on the real estate agent's commission because it seems like a large sum of money.
Food for thought: Putting a sign in the yard is not the only thing your agent will do for you.
Your real estate agent will:
-
Help you minimize liability.
-
Help you implement the best strategy to sell your home.
-
Help you negotiate from a place of experience and knowledge.
-
Spend countless hours answering questions about your property, arranging showings, and marketing the property.
-
Spend their own marketing dollars to promote your property through digital and conventional marketing campaigns and to create marketing collateral like photos, videos and flyers.
-
Curate vendors to help make the process of selling your home easier.
-
Advise you every step of the way until the sale is complete.
Your real estate professional is not just your realtor but also your negotiator, your marketer, market expert, your adviser, curator and strategist.
It takes the experience and knowledge from an educated real estate professional to get the best results possible when selling your home and that you don't find at the dollar store.
Sellers in Florida Answers to Frequently Asked Questions
How much are typical closing costs in Florida?
Average closing costs for sellers in Florida are between 9%-12%. Keep in mind this is an estimate. For a more accurate breakdown contact me, your local real estate agent.
Who pays for closing costs?
The buyer and seller are both responsible for their own fess as closing.
Who covers closing costs when selling a house by the owner?
If you are selling the house for sale by owner, you are most likely paying for your own closing costs and the buyer for theirs.
When are closing costs due?
The closing costs are paid at closing once the title company has received the funds from the buyer or the buyer's lender.
How to save money on Fees?
Here are 3 ways to reduce your cost when selling a house in Florida:
-
Pre-negotiated listing fees
-
Price shop title co. (escrow company) fees
-
Avoid paying credits to buyers
Interested in selling your Florida Home?
Having a knowledgeable and experienced real estate agent who can guide you through the process of the sale of your home is the best investment you can make.
If you are ready to hire a real estate agent: Hire local, shop for knowledge, experience, preparedness and fill out the form below.
Or if you are just interested in knowing you home value in Florida and how much you can expect to get from the sale. Claim you Home Valuation Florida, by Jury Hernandez your local real estate guide.
Conclusion:
Selling your house is a significant journey, and being armed with the right knowledge empowers you to make informed decisions. As your experienced real estate guide, my goal is to simplify this process for you. From understanding the charges involved with the sale of your property to navigating negotiables and non-negotiables, we've covered it all.
Remember, the value of a skilled real estate pro goes beyond a sign in the yard—we're your negotiators, strategists, and advocates. So, whether you're are selling a single-family home in Kissimmee, or surrounding areas having a knowledgeable guide can make all the difference. Let's embark on this exciting journey together, ensuring you not only sell your property but also make the most out of the experience.
Feel free to reach out for a personalized consultation or claim your home valuation report—it's your first step towards a successful and stress-free sale!
