For many people, the buying or selling of a home is the largest transaction they make in their lifetime. It is important to protect your investment, from the point of contract through the closing. It is best to have an attorney to perform the closing of the transaction, this does not cost any more than using a title company. Having an attorney at the closing adds the advantage of legal representation. The attorney for either the buyer or seller may act as the “closing agent” to close a Florida real estate transaction. The contract should always set forth which party shall select and pay for these services.
Real estate closing costs are generally assigned to either the buyer or the seller, and other costs are negotiable or dictated by the customs of your closing location.
Buyer Closing Costs (typical)
When a home buyer is getting a mortgage, the lender is required to provide a good-faith estimate of the projected closing costs. The fees vary according to several factors that can change based on the type of property, locality, and the type of loan applied for (FHA, VA, Conventional, etc), and also by the terms of the purchase agreement. Some of the closing costs, many of which are associated with the loan application, are actually paid in advance. Some typical buyer closing costs include:
- Appraisal
- Loan fees (points, application fee, credit report)
- Inspection fees (we suggest you get an inspection for your protection!)
- Prepaid interest
- Mortgage insurance
- Hazard insurance
- Title insurance
- Documentary stamps on the note
- And most importantly for closing day, the down payment
Seller Closing Costs (typical)
If the seller has not yet paid for the house in full, the seller’s most important closing cost is satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will contact the seller’s lender to verify the amount needed to close out the loan. Then, along with any other fees, the original loan will be paid for at the closing before the seller receives any proceeds from the sale. Other seller closing costs can include:
- Property taxes (prorated)
- Transfer taxes
- Real Estate Broker’s commission
- Documentary Stamps on the Deed
- Title insurance
Functions of the Real Estate Closing Attorney
A closing agent is responsible to perform numerous functions prior to and during the closing, including:
- Ordering title search;
- Ordering survey;
- Assisting in obtaining required insurance;
- Communicating with mortgage broker;
- Communicating with lender;
- Communicating with HOA;
- Issuing title commitment;
- Preparing closing statement HUD;
- Completing loan closing package;
- Conducting closing;
- Disbursing closing funds;
- Recording documents;
- Forwarding recorded documents to parties and lender;
- Issuing and spending title insurance policies to lender and buyer;
- Preparing and filing 1099S Form, if applicable