LEGAL: Closing Costs

Whenever you buy or sell real estate, you encounter closing costs.  Some are fixed payments to third parties, such as documentary stamps, which is a tax (70 cents per $100 based on the sale price) and is typically paid by the Seller (although everything is negotiable as between Buyer and Seller).  Intangible tax is paid by the Buyer (35 cents per $100 based on the mortgage amount). Other fees are paid to the county for recording the deed, mortgage, condo approval, and documents needed to perfect title ($10 for the first page, $8.50 each for the rest).

Lenders have a list of other charges related to mortgages, which vary widely, but are normally paid by the Buyer, such as points (a form of pre-paid interest at 1% of the mortgage amount per point), application fees, document preparation fees, underwriting fees, flood certification and tax certificate fees (the lender hires a service to check the flood zone and that real estate taxes are paid), mortgage insurance, and numerous other possible fees.  There are strategies for minimizing loan costs, but we will discuss that in a future column.

Real estate taxes for the current year are typically pro-rated, so the total is paid by the party in the home when the bill arrives (typically the Buyer), giving them a credit at closing for the number of days of the calendar year when the Seller held title.

The title insurance “Promulgated Rate” is set by state law, and varies based on the sale price.  No one can charge more than promulgated, but it can be discounted.  Nobody makes you discount it, so commercial title companies almost never do, but on larger transactions (such as over $500,000 or $1,000,000), we are happy to do so.  Lenders also require title insurance on their security interest in the property, but we only charge $250 for that.  Some title companies charge considerably more.

A title search costs about $125, and we examine the chain of title documents without further charge.  Finally, there is usually a closing fee to the Seller and to the Buyer for the work involved in putting it all together and conducting the closing.  This varies from about $150 each on the easiest closings, to $350 each or more, where there is extensive loan documentation and other complications.

We make the simple pledge to “meet or beat” any other firms closing costs, and we mean it.  Plus, you have your closing supervised by a real estate lawyer rather than a title company, for no extra charge.

ANDERSON & BRODERSEN, P.A.,
350 Corey Avenue,
St. Pete Beach, FL  33706
(727) 363-6100
www.PropertyLawGroup.com

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