Closing costs are expenses that are incurred when a real estate transaction is closed either by an attorney or a closing agent (title company). Both buyers and sellers are charged closing costs. The closing agent collects all funds and disburses these to the appropriate parties after the closing. Certain costs are traditionally applied to the buyer and others to the seller in the closing process. This is often confusing to the first time seller or buyer, so I'll try to take the mystery out of this part of the process of selling or buying property.
In North Florida, the buyer customarily pays for all costs incurred after the transfer of the property. Since real estate taxes are paid in arrears, the closing agent will pro-rate the property taxes based on the previous year's assessment, unless the current tax amount is available. The buyer is responsible for the taxes from the day of closing until the end of the calendar year.
Other costs charged to the buyer may include hazard insurance, recertification of the abstract and all costs associated with obtaining financing for the property. These usually include a survey of the property, appraisal fee, origination fee, and credit report. We do suggest that the buyer have a home inspection and termite inspection done. These costs are paid by the buyer.
Prepayment of insurance and taxes to an escrow acount may be required by the lender. The buyer also pays the documentary stamps on the new note and intangible tax on the new mortgage. In Florida, documentary stamps are currently 35 cents per $100 (or portion thereof) of the note. Intangible tax is .002 on the dollar of the mortgage. The buyer also pays for recording the deed, mortgage and note.
Any of these fees are negotiable in the sales process and may be assumed by either party, according to the agreement between the buyer and the seller. Some banks and mortgage companies may have additional fees.
