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Closing Costs in Orlando, Florida

Closing Costs in Orlando, Florida

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What are Closing Costs

Most people have no idea about the various costs involved when a residential real estate property is transferred from one person to another. Simply put, closing costs are the payments made when a real estate transaction is finalized. During this time, the parties involved in making the sale of the Orlando, Florida property possible are compensated and the title of the property is transferred from the seller to the buyer.

When you get a mortgage, you will have to pay closing costs, which are fees by lenders and other third parties related to the purchase of your new home. Essentially, aside from owing the lender the down payment on the property and the principal and interest related to the mortgage, you will also owe the lender and third parties closing costs which will be paid once you close on your mortgage.

Closing costs differ from one place to another and will depend on the location of the property you will be buying. Generally, a buyer can expect to pay between 2% to 5% of the purchase price of the property. In Florida, there is no law requiring one party or the other to pay the closing costs of a residential real estate purchase. All closing costs can be negotiated between the buyers and the sellers. Depending on market conditions, one party may agree to pay a portion or all of the closing costs.

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Average Closing Costs for Buyers and Sellers in Florida

In Florida, closing costs are customarily (but not always) divided between the buyer and the seller. To give you an idea of what the closing costs are and how much you will be paying, here are the cost estimates based on a $750,000 residential property. It is important to note that some of these expenses may be higher for homes valued at more than $750,000.

Average Closing Costs for Buyers in Florida

Closing CostAverage Amount
Property Survey$275-$450
Professional Appraisal$300-$450
Property Inspection$450-$750
Insurance PremiumHomeowners, Wind, and Flood Insurance
Mortgage Loan FeeContingent on loan amount
Documentary Stamps$3.50 per $1,000 of mortgage amount
Intangible Taxes$2.00 per $1,000 of mortgage amount
Mortgage Recording Fee$10 for first page, $8.50 for each additional page
Settlement and Closing Fee$350-$550
Overnight Delivery of Settlement Package (if required)$25-$50

Average Closing Costs for Sellers in Florida

Closing CostsAverage Amount
Municipal Lien and Tax Search$250-$450
Title Search$175-$250
Real Estate Commission6% of sales price
Title Abstract$175-$250
Document Preparation$350
Mortgage PayoffSubject to loan balance
Documentary Deed Stamps$7.00 per $1,000 of sales price
Prorated Real Estate TaxCurrent year taxes are prorated at closing
Deed and/or Other Recording Fees$10.00 for the first page, $8.50 for each additional page

In addition to the expenses listed above, there are some costs whose responsibility for payment is determined by the Purchase and Sale Agreement:

  • Owners Title Insurance Policy – Based on the sales price
  • Simultaneous Bank Title Insurance Policy
  • Endorsements to the Title Insurance Policy

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Breakdown of Florida Closing Costs

  • Appraisal
  • Fed-Ex Fee
  • Escrow Fee
  • Survey Fee
  • Courier Fee
  • Notary Fee
  • Closing Fee
  • Property Tax
  • Attorney Fee
  • Credit Report
  • Application Fee
  • Settlement Fee
  • Recording Fees
  • Origination Fee
  • Prepaid Interest
  • Transfer Taxes
  • Home Inspection
  • Underwriting Fee
  • Homeowners Insurance
  • VA Funding Fee (if applicable)
  • Owner’s Policy Title Insurance
  • Lender’s Policy Title Insurance
  • Title Company Title Search Fee
  • Home Owners Association Transfer Fees
  • Flood Determination or Life of Loan Coverage
  • Private Mortgage Insurance (if down payment is less than 20%)
  • Closing Fee
  • Title Search
  • Courier Fee
  • Estoppel Fee
  • Pest Inspection
  • Property Taxes
  • Title Insurance
  • Documentary Stamps
  • Real Estate Commission

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Ways for Orlando Home Buyers to Lower Their Closing Costs

For first time buyers, learning how much their closing costs could amount to can be quite overwhelming, but there are a few ways that you can reduce these costs:

1. Shop Around for Title and Closing Services

title company plays two important roles in your real estate closing transaction. First, it provides you with title insurance to protect you against claims that can be made against the title of the property. And second, it manages and conducts the closing process. As a buyer, you have the right to choose a title company. This is an important decision to make and it is best that you shop around before you you’re your pick. You can ask your real estate agent or lender for suggestions, but it is also good to ask family and friends for referrals. Choosing the right title company will not only ensure a smooth settlement day, it can also save you a lot of money. According to a survey conducted by Federal Title & Escrow Company, home buyers can save as much as $1,180 by shopping around for title services.

2. Ask the Seller to Shoulder Some of the Closing Costs

In Florida, while there are certain closing costs that are customarily paid by the seller, keep in mind that some of the buyer’s expenses are negotiable. You may be able to convince the seller to shoulder other closing costs that are usually the responsibility of the buyer, especially if the seller has been on the market for quite some time and you are the only person who is interested in purchasing their property.

3. Opt for a “No Closing Cost” Mortgage

Those closing costs usually amount to thousands of dollars. If you don’t have the cash to pay for the closing costs upfront, the best option for you is to add these to the loan amount when you refinance your mortgage. While lenders offer “no closing cost” mortgages, be ready for a higher interest rate over the life of the loan. This is also ideal if you don’t plan on staying in your home for more than five years because the slightly higher mortgage rate is going to be less expensive over the course of five years compared to the amount that you would pay upfront in closing costs. Another good reason for opting for a “no closing cost” mortgage is when you need the cash to make renovations on your new home.

4. Sign Your Loan Papers at the End of the Month

The best time to close the deal is at the end of the month, because this reduces your cash outlay for prepaid or “per diem” interest for the period between your loan closing and the beginning of the next month. If you want to calculate your savings, multiply your loan amount by your interest rate then divide the result by 365 to get your daily interest charge. Multiply that figure by the days left in the month to see how much you will be saving.

A Hand Holding the Key to a New Home

If you need an accurate estimate of the closing costs you may incur in buying a property in Orlando, Florida, I will be very happy to help. Please contact me at 281-701-5117 or send me a message using the form below:

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