You may have a vague idea of what your home is worth, but if your are considering selling your Florida home, the real question is how much money will you walk away with when your home is sold?There are fees and taxes you need to be aware of that comprise your total closing costs. Your agent can draw up a calculation of your estimated closing costs for you based on the purchase price of your property. This is commonly known as a Net Sheet. Here are the common fees for selling a home in Florida:
Commission
The commission is the biggest chunk of the cost to sell a home. The market commission being asked throughout much of the country is 6%. But like everything in real estate it is negotiable. At the end of 2022 the average commission was 5.2%. There has been downward pressure on commissions mostly due to the lack of available homes to sell. I am willing to lower my fees as long as I feel the asking price is reasonable.
Transaction Fee
Many brokers will charge a Transaction Fee. Sometimes referred to as an administrative fee to cover administrative and record keeping costs. $295 or $395 is a common. I do not charge these fees to my customers.
Doc Stamp Tax
This is the transfer tax paid by the seller. It is paid at a rate of $70 per $1000 of the sale price. To make the math a little easier multiply the purchase price by .007
Lien Seach
The title agent will have a 3rd party search for any outstanding liens on the property including the mortgage. It could also include mechanics liens for unpaid repairs, code violations and utility liens. This fee can vary. Usually it is $200 to $300.
Title & Escrow Charges
This is the fee charged by the title agent to draw up the closing documents and represent the seller during the closing process. This fee can vary. It is usually $500 to $700.
Title Insurance
Who pays the title insurance varies a bit by county. In Broward County it is customary for the buyer to choose the title company and pay for the title insurance. In Palm Beach and some other counties the opposite is true. The seller chooses the title company and pays the title insurance. The promulgated rate for title insurance is 0.55%
Estoppel Fee
This applies only to sellers of condominiums and some HOAs. The title company will order what is known as an estoppel letter. An estoppel letter outlines the current owners financial standing within the association. If any monthly dues or assessment are outstanding. This fee varies by association. Typically $200 to $500.
Property Taxes
Usually your pro-rated property taxes will be credited to the buyer of your home. The buyer will end up paying the property taxes for the whole year when due at the end of the year. You are responsible for the portion of the year you still lived there. For example if your yearly taxes were $4000 and closing took place at the beginning of April you would credit the buyer about $1000 at closing and they would pay the whole thing at the end of the year.
Mortgage Payoff
Your mortgage isn't exactly a cost but it must be paid off at closing. It's a good idea to give your lender a call to get your actual payoff. It could vary from what you see on your monthly mortgage statement. If you haven't had the mortgage very long you could be subject to a pre-payment penalty or other administrative fees.
Miscellaneous
Many small charges for things like making wire transfers, estoppel fees, courier services can accumulate and is difficult to estimate. You can usually figure several hundred dollars in miscellaneous fees.
Below is a Net Sheet calculator for you to do a quick estimation of what your net proceeds will be after all the fees are deducted.
Keep in mind this is for estimating purposes only and doesn't include pro-rated taxes. That is a more complex calculation. When you have your home under contract you can request a HUD closing statement from the closing agent that will give you the exact amount. You can also ask the closing agent for a preliminary HUD statement if you are in the process of negotiating and need a more exact figure before signing contracts.
Related:
Avoiding the FIRPTA Withholding for Foreign Property Sellers
The Best Time For Selling Real Estate in Florida
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