When purchasing or selling a property, the amount owed for closing costs may feel like a gray area. Below is a breakdown of what is included in closing costs.
What are closing costs?
- Closing Costs are paid for to the title company recording fees and transfer fees for the property, and to the lender for originating and processing the new loan.
How much will closing costs be?
- If a buyer is obtaining a loan, closing costs will amount to roughly 2.5% of the purchase price.
- If the buyer is paying cash, closing costs should be less than 1%.
- The reason that the amount is higher on financed deals is because of the cost of loan origination
- Sellers will have to pay a lein search of roughly $330
- Estoppel fee – The condo association will charge a fee providing information on the association’s standards and financials, such as special assessments, monthly fees, parking space dues, etc. This fee varies, however it can range upwards of $200 – $350 in Miami.
Who pays for these costs?
- In Miami Dade, there is a standard Miami Dade county provision on the purchase contract that outlines which party pays for which costs.
- According to this provision, the buyer is to pay for their own title policy, and the seller to pay for their lien search, estoppel, and title search.
How can I see what my closing costs will be?
- I often work with Global Title Alliance, a title company located in the Keller Williams Miami Beach office. They provide a free online application which not only estimates monthly payments and closing costs, also provides an estimate of the preliminary HUD.
- Payment estimator:
- Estimator for Preliminary HUD
Do you have a particular scenario you would like to discuss? Feel free to call or text Ashley Dortch – (347)268-4080 or email email@example.com