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    Closing Costs

    By November 20, 2022No Comments

    Who Pays What at the Closing Table in Tallahassee?

     

        Buyer   Seller   Notes:
    Earnest Money Deposit (with offer)   X       This amount is usually around 1% of the offer, but the amount can be negotiated.
    Down payment on loan   X       Varies with type of loan. VA and USDA can be zero.  FHA is at least 3.5% and Conventional is at least 3%, depending on income and home buyer status.
    Property Inspections   X       Amount varies with type of property, inspectors, and inspections ordered.
    Termite (WDO – Wood Destroying Organism Report)   X       Ordered and paid for by buyer.  This inspection and a ‘clear/clean’ report are required for VA loans and some FHA and conventional loans.
    Property repairs required by loan.       X   VA and FHA loans may have conditions placed on them by the appraiser that would need to be repaired by seller before closing. These repairs need to be verified by an appraiser before closing.
        Buyer   Seller   Notes:
    Loan origination fee/Processing fee*   X       Most loans fees are the responsibility of the borrower.  This a bank’s administrative fee for loan paperwork.
    VA water test   X       With properties on well water, the VA may require an independent well water test for safety.
    Underwriting fee*   X       A fee that goes to the company/organization that underwrites the loan.
    Discount points   X       Discount points are paid by the buyer to lower the rate and obtain a lower monthly payment on the loan.
    Lender credit*           Lender can offer a higher rate so they can contribute to the buyer’s closing costs with a credit at closing.
        Buyer   Seller   Notes:
    Credit report*   X       Some lenders will pull another credit report just before closing. Depends upon the bank/loan rules, and credit worthiness.
    Appraisal report   X       Ordered by the bank and paid for by the buyer. Report is not given to anyone except the buyer.
    Property taxes   ?   X   This one can be confusing. These taxes are collected in arrears – meaning you pay 2020 taxes when 2020 ends. Seller owes taxes from January 1 up to the day of closing. Buyer receives a credit at closing for the seller’s portion of property taxes. At the end of the year (or beginning of the next)– the buyer pays the entire tax bill.
    Insurance   X       The property insurance yearly premium is generally collected at closing and sent to the insurance agent.  Lender may require the equivalent amount to X months to be placed in the escrow account, depending on lender/loan requirements.
    Flood certificate   X       Required by lender for properties in or near a flood zone.
        Buyer   Seller   Notes:
    Prepaids (interest, premiums, etc.)   X       Mostly covered above with points and insurance.  Could also include interest for the month of closing, escrow funds, HOA dues.
    Existing mortgage payoff       X   Sellers must pay off the mortgage at closing.
    Payoff demand       X   Sometimes banks charge you to prepare the exact amount you owe for the closing agent.
    Prepayment penalty on existing mortgage.       X   These are not as common as they were.  Read the fine print of the note you signed, and you may find out that they charge to pay it off earlier than expected.
    HOA estoppel fee       X   The official document that records the amount of HOA dues owed by the seller. If paid monthly, buyer is responsible for the month after closing.
        Buyer   Seller   Notes:
    Home warranty premium   X   X   Often negotiated back and forth between buyer and seller.  Sellers – if you are living in the home, many Tallahassee buyers expect you to offer a home warranty. Buyers- in a seller’s market, they are not as commonly offered.
    Realtor’s commissions       X   Listing agent negotiates the commission for both agents.  Not all agents split it evenly. Jerks.
    Owner’s title insurance policy   ?   ?   This insurance policy covers the buyer for as long as buyer owns the house. Typically paid by whoever chooses the closing agent.  In Tallahassee, this is negotiable.
    Lender’s title insurance policy   X       This policy covers the lender for as long as there is a mortgage on the property. It is a required closing expense for the buyer.
    Recording fees   X       This is what Tallahassee/Leon County charges you to officially record the mortgage and change the owner information in the official court documents.
        Buyer   Seller   Notes:
    Transfer fees       X   Sellers version of above…This is what the Tallahassee/Leon County charges you to remove your information in the official court documents.
    Document stamp on mortgage   X       Tax paid to Tallahassee/Leon County on the recording of the mortgage
    Document stamp on deed   ?   X   Tax paid to Tallahassee/Leon County on the name change to the deed. On REO properties, this must be paid by the buyer.
    Intangible tax   X       This is the tax on the loan paid to the State of Florida when the mortgage is recorded.  It is collected at closing. This tax is calculated by multiplying the amount of the promissory note by 0.2%.
    Closing fee   X       This is the amount the title/closing agent charges to process the paperwork.
    Courier fees/Edoc Fee   X   X   If you live out of the area or your documents need to be physically taken to the courthouse there may be a courier fee. If papers are filed electronically there may be a fee for doing so.
    Mail out fees   X   X   If either buyer or seller are not in the Tallahassee area for closing, there may be an additional charge for postage and packaging.

    *  The fees charged per loan vary greatly from lender to lender, and borrower to borrower.  Shop your mortgage around and ask lenders to explain their fees and costs to borrow.

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