WHO PAYS FOR WHAT... AND HOW MUCH?

A contract can be structured so that the costs of the transaction can be paid by either party; however, the standard contracts reflect the normal and traditional method of dividing the costs.  Those traditions are described below.

SELLER’S COSTS

1. Commissions. As per agreement between the Seller and the Realtor.  If the contract form does not provide a space for the commission amount, it is important that the agreement be in writing either by separate document or in the contract addendum.

2. Title Insurance and related fees. The cost of the title insurance policy depends on the sales price; the minimum rate established by the State of Florida is called “Promulgated Rate”, and is $5.75 per thousand up to $100,000, and $5.00 per thousand thereafter (up to $1,000,000).

The related fees include the title search and the title examination fees.  These are services which are required in order to issue a title policy, and are therefore a Seller’s expense.

3. Closing Fee. Again, this is a State required fee.  Most title companies, including Bayshore Title, charge an equal amount to both the Buyer and the Seller.  Our fee is generally $150 to each party, but may be more depending on the complexity of the transaction.

4. Documentary Stamps on the Deed: Paid to the Clerk of the Circuit Court when the deed is recorded.  The amount depends on the sales price, at $7.00 per thousand.

5. Real Estate Taxes: If the closing is between January and November, the Seller will  credit to the Buyer their prorated share of the real estate taxes for the current year.  If the closing occurs in November or December, the Seller will pay for the full year and receive a credit back from the Buyer for the Buyer’s portion.

6. Misc. Fees: Normally there will be some minimal charges for recording and for sending in the payoff via overnight delivery.

BUYER’S COSTS

1. Loan Fees. These are the fees charges by the lender in connection with the loan, such as the appraisal, credit report, and document prep fees.  They should all be disclosed on the lender’s Good Faith Estimate.

2. Interest paid in Advance. The per diem interest on the Buyer’s loan from the date of closing through the end of the month.  Thereafter, interest is paid in arrears.

3. Insurance. The first year’s premium must either be paid prior to closing or collected at closing.  We recommend that the Buyer pay in advance to guarantee availability of coverage on the day of closing.

4. Escrows. The amount that the lender determines must be collected at closing to initially fund the escrow account.  Normally this is three months of property taxes and insurance.

5. Closing Fee. This fee is to the closing agent for conducting the transaction.  Our fee is generally $150 to each party.

6. Mortgagee’s Title Insurance. When the loan amount is less than or equal to the sales price and issued simultaneously with an Owner’s Policy, the Mortgagee’s Policy (or Loan Policy) can be issued at a flat rate.  With the normal endorsements that are required by the lender.

7. Survey. We prefer to order the survey because we can control the quality and delivery.  In addition, the companies we work with give us what we feel is a very competitive price.  A normal house survey will run $250; if the house is in a flood zone, add $50 for an elevation certificate.  If the property is larger, or if the Surveyor runs into complications, the charge could be more.

8. Termite Inspection. Normally this fee is about $60.

9. Recording Fees. The Buyer pays for the recording of the deed and the mortgage.

10. Documentary Stamps and Intangible Taxes on the Mortgage. These fees are paid to the Clerk of the Circuit Court when the mortgage is recorded and is based on the loan amount.  The Doc Stamps are $3.50 and the Intangible Tax is $2.00 per thousand.

11. Miscellaneous Fees. There are normally incidental charges for couriers or wiring; generally these fees are at least $85.00.