Who Pays Closing Costs in Broward County Florida

Who Pays Closing Costs in Broward County Florida

Good work being prepared and doing your research in regards to knowing your closing costs when you sell a home. Many people find themselves in the dark as regards to who pays closing costs in Broward County, Florida. In general the the costs associated with the transfer of property from one person to another can be hard to keep in mind when you're in the transition of selling a house and moving on. 

Unlike the buyer’s closing costs, the fees a seller pays to close on a home are usually limited. Nonetheless, they can end up being high. This is because Florida has fees attached to the deed of a home which can substantially add to these closing costs.

When it comes to who pays closing costs in Broward County Florida - the short answer is that closing costs are customarily divided between the buyer and seller. That being said, there isn't any law in Broward County (or in any county in Florida for that matter) that requires one party or the other to pay any particular item of the standard closing costs in a real estate purchase. Depending on the contract, one party may agree to pay all or part of the closing costs in order to enhance a deal or get one completed.

In this article, I'll break down the types of closing costs that each party can expect to pay. I'll assume that our example property is valued at less than $750,000 as survey, inspections, and other fees can increase for homes valued at more than $750,000.

As always, don't hesitate to contact me with questions or clarification. I'll start with the seller.

Seller's Closing Costs in Broward County 2020 Quick Reference List:

  1. Municipal Lien and Tax Search minimum cost: $250
  2. Title Search minimum cost: $175
  3. Title Abstract minimum cost: $175
  4. Document Preparation minimum cost: $350
  5. Documentary Deed Stamps: $7.00 per $1,000 of sale price.
  6. Deed and/or Other Recording Fees minimum cost: $18.50
  7. HOA/Condominium Association Estoppel fees approximate cost: $250
  8. Real estate tax, prorated
  9. Real estate commission: approximate cost: 6% of sale price.
  10. Any mortgage payoff.

Seller's Closing Cost Explained: 

1. Municipal Lien and Tax Search
Cost Range:
What is it?:  

This search looks for unrecorded property issues that a traditional title search won’t uncover. This includes unpaid utility bills, code violations, special assessments, property taxes, and open or expired permits. These municipal issues aren’t in the public record but still pose a problem as new owners may be held liable for these debts and issues.

2. Title Search
Cost Range:
What is it?: 

A title search is an examination of public records to determine and confirm a property's legal ownership, and find out what claims or liens are on the property. A clean title is required for any real estate transaction to go through properly.  

3. Title Abstract
Cost Range:  $175-$250.
What is it:
A property abstract, which lists all the legal activities associated with a particular piece of real property, is a powerful tool. The abstract is based on documents that are tied to the property, including deeds, mortgages, litigations, tax sales and so on and so forth. It also includes a list of all the owners of the property, along with such information as the duration of their ownership and moments when it changed.

4. Document Preparation – $350.
Cost Range:
What is it:
These costs are associated with the preparation of the Deed, Bill of Sale, and any Affidavit(s).

5. Documentary Deed Stamps
Cost Range:
What is it:

The Deed Stamp tax is collected when real property changes hands or is sold through the public records. Broward County charges $7.00 per $1,000 of the sales price. So you're looking at a sizable bill of anywhere from $1,750-5,250 for a home sold for $250,000 - $750,000

6. Deed and/or Other Recording Fees
Cost Range:
$18.50 -$35.50
What is it:

This is a fee paid to the Broward county offices for the recording of the property deed.

7. HOA/Condominium Association estoppel fees
Cost Range:
$250.00 - $350.00
What is it:

An estoppel fee is a fee charged by the homeowners association to the title company in order for them to determine the status of your account. They will determine if you are current and on-track, if you are behind, or if there are any special assessments that are due by the seller.

8. Real Estate Tax Prorated – 
Cost Range:
1.08% of the homes value - prorated 
What is it:

The current year taxes are prorated and paid at closing.

9. Real Estate Commission
Cost Range:
Approximately 6% of the sales price.
What is it:

Commission paid to the brokers and agents involved in the property transfer. Your commission for your broker ensures they can securing the highest-possible sale price for your property in the shortest possible time.

10. Mortgage Payoff
Cost Range:
What is it:

A mortgage payoff amount is how much you will actually have to pay to satisfy the terms of your mortgage loan and completely pay off your debt. Your payoff amount is different from your current balance since the payoff amount also includes the payment of any interest you owe through the day you intend to pay off your loan.

When it comes to who pays closing costs in Broward County Florida, the seller is actually stuck with a fairly large bill as compared to other locations in the US. This highlights the importance of working with an agent who can secure the best price for your property. Now, let's move on to the buyer's closing costs.

Buyer's Closing Costs in Broward County 2020 Quick Reference List:

  1. Property Survey: $275-$450.
  2. Professional Appraisal: $300-$450.
  3. Property Inspection: $450-$750.
  4. Insurance Premiums: Wide range of costs.
  5. Mortgage Loan Fee: .5 % - 1% of the loan amount.
  6. Documentary Stamps: $3.50 per $1,000. of mortgage amount.
  7. Intangible Taxes: $2.00 per $1,000 of mortgage amount.
  8. Mortgage Recording Fee: $10 for first page, $8.50 for each additional page.
  9. Settlement & Closing Fee : $350 -$600.

Buyer's Closing Cost Explained: 

The buyer's closing costs usually end up between 2- 5% of the purchase price of the home. Let's break down these costs:

1. Property Survey
Cost Range: $275-$450
What is it:
Property surveys are done to determine or confirm property boundaries, such as the plot of land a home sits on. They also identify other types of restrictions and conditions that apply to the legal description of a property. Among other things, a property survey might help the buyer to discover if the legal description of the land they're purchasing is accurate.

2. Professional Appraisal
Cost Range: $300-$450
What is it:
An appraisal involves many factors including, research about the market area in question, the analysis of information pertinent to a property, as well as and the knowledge, experience, and professional judgment of the appraiser. Appraisals for commercial investment properties can be especially tricky, for more on this topic, see my post about commercial property valuation.

3. Property Inspection
Cost Range: $450-$750
What is it:

A home inspection is a visual examination of the structure and systems of a house, from the roof to the foundation. A home inspection will cover condition of the home's heating system; central AC system; the roof, attic and visible insulation; interior plumbing; electrical system; the walls, ceilings, floors, windows and doors; and the foundation, basement and structural components. 

4. Documentary Stamps Due on Financing
Cost Range: $3.50 per $1,000 of a mortgage amount

What is it:
The Documentary Stamp tax is collected when a promissory note is given for the purchase of real property. Broward County charges $3.50 per $1,000 of the mortgage amount.

5. Intangible Taxes
Cost Range: $2.00 per $1,000 of mortgage amount

What is it:
The intangible tax is collected in order to publicly record a promissory note is given for the purchase of real property. Broward County charges $2.00 per $1,000 of the mortgage amount.

6. Mortgage Recording Fee
Cost Range: $10 for first page, $8.50 for each additional page.
What is it: This is the fee assessed by Broward county for legally recording your deed, mortgage and documents related to your home loan.

7. Insurance Premiums: Homeowners, Wind and Flood Insurance
Cost Range: Any
What is it:

Florida home insurance tends to be quite a bit higher than the national average (about $1,300 higher, in fact). Also, most insurance firms don't cover flood damage, which is an important consideration in flood-prone South Florida. Finally, many homeowners insurance plan don't cover types of damage caused by wind and hurricane, so an additional plan may be needed there as well.

8. Mortgage Loan Fee
Cost Range: .5 % - 1% of the loan amount
What is it:
This is a fee charged by your lender to process your loan application as compensation for executing the loan.

9. Escrow Fee
Cost Range: $350 -$600
What is it:

This is a fee due to the title company or escrow company for their services on closing day. Escrow fees may be paid to the title company or directly to the escrow company to set up escrow for earnest money. The escrow fees cover both paperwork and the exchange of funds.

Buyers closing costs can be substantial in a Broward county property transaction. When you put together taxes, fees, and insurance you can see that any transactions constitutes an investment in itself. Really, no matter which side of the transaction you're on you'll find that the commitments are substantial. This underscores the need to have a highly-experienced agent and broker to represent and negotiate for you.