Title insurance protects the buyer of a home from defects in the title not caught by the title and municipal lien search, subject of course to certain exceptions to coverage. Title insurance is required by lenders if the buyer finances his or her home purchase. A title commitment will be issued after the required searches are done, and before a minimum number of days, as specified by the contract, prior to closing.
Settlement or closing fee
The settlement or closing fee is paid typically by the buyer to the Florida closing attorney for his or her services on closing day. The flat fee ranges from $300 to $600 in lower cost counties to $600-$900 in higher cost counties. This cost is offset by buyers and sellers not being required to hire their own, separate attorneys in Florida.
HoA or building fees
Only applicable for condo buyers where the the managing agent (i.e. the building management company) or the homeowner’s association (HoA) will charge one or more fees to set the buyer up, even if the building doesn’t have a formal application process.
Surveys are not typically done when buying a condo because the condo declaration will already include a survey of the property and unit from the time of construction and a review is typically sufficient. If you’re buying a house, a survey is critically important to ensure there are no encroachments associated with fences or easements, which would be treated as a defect in the title by most real estate contracts.
Home inspection fee
A home inspection is critical if you’re buying a free-standing property like a single-family house, but is still customary to do in Florida even for condos where you’re only responsible for the interior of the apartment. Typically costing a few hundred dollars and paid for by the buyer, the inspection is conducted during the inspection period after contract signing.
County recording fees
Official documents such as deeds and mortgages need to be original or court certified as well as signed and notarized to be accepted as an official, public record. The fees you’ll pay will vary by county, but you can generally expect to pay under $50 all in.
Florida Documentary Stamp Tax
Buyers will customarily pay the tax on the loan amount if they are purchasing with a mortgage, whereas sellers will customarily pay the tax, at a different rate and on the contract price, for the deed transfer. Similar to the Mortgage Recording Tax seen in NYC, the Florida Documentary Stamp Tax rate is 0.35% of the loan amount.
Florida Nonrecurring Intangible Tax
Florida imposes an additional, one-time tax on indebtedness of Florida real property called Nonrecurring Intangible Tax. This is also similar to NYC’s Mortgage Recording Tax, and amounts to 0.2% of the loan amount to be paid by the buyer if he or she intends to finance the purchase.
Bank processing fee
$1,000 to $1,500 on average. Often referred to as a “bank fee” or “application fee” and used to cover the bank’s administrative costs of processing your mortgage application.
$400 to $500 on average and typically paid by the buyer by credit card before closing. Though not technically a closing cost that’s paid on closing day, an appraisal is required by lenders to assess the value of the collateral.
Credit report fee
Typically $20 to $30. Lenders will often bill the borrower for running a hard credit check on their file.
Home insurance premium
Home insurance is required by lenders, but optional if you are purchasing all cash. With that said, home insurance is extremely important in natural disaster prone Florida, especially if you are buying a free-standing structure like a single or multi-family house. While rates for H06 insurance (i.e. interior only insurance for condos) are low and similar to what you’d see in New York, all-in home insurance rates are significantly higher for houses due to the need to also purchase flood insurance.
Florida Form 9 endorsement
Because title insurance policies typically don’t insure against defects found via the survey, many lenders will require borrowers to get an additional layer of protection to safeguard against loss or damage from violations of deed restrictions, encroachments, and building setback requirements. The cost of this endorsement is 10% of the cost of the title insurance premium.