Closing Expenses 101

Have you ever wondered what all of the closing expenses on the HUD are and why you are paying for them? Well, here’s a breakdown of the most typical expenses:

SELLER EXPENSES:

Real Estate Commission: Customarily paid at closing by the Seller and is generally negotiated prior to signing a Sales Contract and evidenced by a Commission Agreement.
Broker Transaction/Adminstration Fee: LRG does not charge this fee, however, many other real estate brokerages do charge a fee.
Abstracting or Title Update Fee
Title Examination
Owner’s Title Insurance Premium: Paid by Seller in most counties other than Miami-Dade and Broward.
Tax and Lien Search
Recording Fees: Miami-Dade, Broward, and Palm Beach.
Documentary Stamps on Deed: The rate is $.70 per $100 of purchase price ($.60 per $100 in Miami-Dade County).
Homeowner’s or Condo Estoppel Fee
Mortgage Payoff
Homeowner’s or Condo Assessment
Real Estate Taxes: Usually prorated from January 1st of the year of the sale.

BUYER EXPENSES:

Lender & Mortgage Broker Fees: There are many various fees collected by the lender and/or mortgage broker (Document Preparation, Underwriting, Credit Report, Flood Determination, Courier, Assignment, Processing, etc.) ALWAYS ask your lender or mortgage broker for a Good Faith Estimate of Fees before you apply for your loan. This free 1-2 page form details the estimated charges that you will pay at closing.
Pre-Paid Interest:
First Year of Property Insurance
First Year of Flood Insurance
Pre-Paid Escrows
Closing or Settlement Fee
Title Examination Fee
Owner’s Title Insurance Premium
Lender’s Title Insurance Premium
Title Insurance Endorsements
Shipping and Handling Fee
Wire Transfer Fee
Recording Fees: Miami-Dade, Broward, and Palm Beach.
Documentary Stamps on Mortgage
Intangible Tax on Promissory Note
Appraisal: Usually ordered by the lender on your behalf and collected upfront with your application fee.
Survey:

The above list represents typical and common expenses found on a closing statement (HUD) however this may not be a complete list and every party to a transaction is encouraged to read their contract and/or seek the assistance of a real estate attorney who is able to more fully explain your obligations in a real estate transaction.