Florida Closing Costs for Buyers

The buyer and seller split under the standard Florida contract

Most Florida residential deals are written on the Florida Realtors/Florida Bar contract forms. Those forms set a default split that everyone then negotiates around:

• Seller usually pays: documentary stamp tax on the deed, the cost of clearing title problems, and the owner's title policy in most counties.
• Buyer usually pays: documentary stamp tax on the mortgage note, the intangible tax on the mortgage, recording of the mortgage, the lender's title policy, all loan fees, inspections, the survey and prepaid items.
• County custom on the owner's title policy: in Miami-Dade, Broward and some other counties the buyer pays it and picks the title company. In most of the state the seller does.

Everything on that list can be moved by contract. A seller can agree to pay part of the buyer's costs as a credit, and a builder can shift deed stamps to the buyer in its own contract. What you sign controls, so I read the closing cost paragraph of every offer line by line before it goes out.

The state taxes, worked out on a typical Florida home

Two taxes are fixed by statute and land on a financed buyer:

• Note stamps: $0.35 per $100 of the mortgage amount.
• Intangible tax: 0.2% of the mortgage amount.

On a $375,361 purchase with 20% down, the loan is about $300,289. Note stamps come to roughly $1,051 and the intangible tax about $601, for $1,652 combined. A cash buyer pays neither.

The deed stamps are larger, $0.70 per $100 of price in most counties, or about $2,628 at the statewide typical value. They stay with the seller unless your contract says otherwise. In Miami-Dade the deed rate is $0.60 per $100, plus a $0.45 surtax when the property is anything other than a single-family home.

Price changes these numbers in a straight line. Zillow's county values run from $166,734 in Calhoun County to $962,885 in Monroe County, so the same 20% down purchase carries mortgage taxes of roughly $734 at the low end and about $4,237 at the top.

Lender charges and third-party fees

Lender costs vary more than anything else on the statement, and they are where comparing offers pays off. Expect some combination of an origination or underwriting fee, discount points if you buy down the rate, an appraisal, a credit report, flood certification and tax service fees.

Your Loan Estimate, which the lender must send within three business days of a complete application, lists all of them in a standard format. Get two or three from different lenders on the same day and compare section A (lender charges) and the points line side by side. The rate alone tells you little if one offer includes a point and the other doesn't.

Third-party costs come next: the lender's title policy and its endorsements, the title agent's settlement fee, title search and lien searches, a survey if you order one, recording fees for the mortgage and deed, and an HOA or condo estoppel letter if the property is in an association. Estoppel fees are often charged to the seller by contract, so check which side your contract puts them on.

Prepaids and escrow: the part that surprises people

A large share of the cash a buyer brings is money paid ahead, not fees. In Florida that block is often bigger than in other states because insurance costs more here.

• Homeowners insurance: the first full year of premium, paid at or before closing.
• Flood insurance: a full year if the lender requires it (high-risk A and V zones) or if you choose to carry it.
• Escrow cushion: several months of insurance and property tax deposited into the lender's escrow account.
• Prepaid interest: daily interest from the closing date to the end of that month.

Florida property taxes are paid in arrears, for the calendar year, with bills going out in November. At closing the seller credits you for their share of the year, and you pay the whole bill later. That credit lowers your cash to close, but it is based on the seller's tax bill, which can be far smaller than yours will be once the assessment resets after the sale.

Closing date moves the prepaid numbers. Closing near the end of a month means less prepaid interest. Closing late in the year means the seller's tax credit is large, and your first bill arrives within weeks.

Costs that depend on the type of property

Some lines only appear for certain homes:

• Condos: association application or approval fees, a capital contribution some associations charge new owners, and an estoppel letter. Ask whether there is a special assessment the seller must pay off at closing or that passes to you.
• HOA communities: transfer fees, estoppel and sometimes a one-time contribution to the reserve fund.
• New construction: builders often charge the buyer deed stamps, and a builder closing fee. Builder incentives tied to their preferred lender can cover part of this, so price the incentive against an outside loan.
• Older homes: 4-point and wind mitigation inspections paid during the inspection period, which also feed the insurance premium you prepay.

How buyers bring the number down

Four tools do most of the work:

• Seller credit. Ask for a credit toward closing costs in the offer. Lenders cap how much a seller can contribute, based on loan type and down payment, so ask your lender for the limit before writing it in.
• Title company choice. The title premium itself is set by the state, but settlement, search and other title agent fees are not. In counties where the buyer pays the owner's policy, compare fee sheets.
• Lender comparison. Same-day Loan Estimates are the single biggest lever.
• Insurance shopping early. A wind mitigation report on a house with good roof-to-wall connections or shutters can reduce the premium that sits in your prepaids.

Down payment assistance through Florida Housing can also cover closing costs for eligible first-time buyers. This isn't legal or tax advice, and your lender's Closing Disclosure, due three business days before signing, is the final word on your numbers. If you want those numbers run on real listings in your price range, a shortlist is the easiest place to start.