Find out how much you can expect to pay in closing costs when buying a home in Florida. Explore typical fees and what they cover.
Florida has long been a popular travel destination for tourists and anyone else searching for some vitamin D. But in the past decade, the Sunshine State has also become the favorite new home for millions of Americans. Florida had the highest national net migration in the country in 2022—meaning the state gained far more residents than it lost—beating out both Texas and North Carolina.1
All these newcomers to the state will quickly discover that there’s much more to Florida than theme parks and beaches. They’ll also discover that Florida’s closing costs stand out compared to the rest of the country. So how much are closing costs in Florida and what closing costs should you look out for? Whether you’re new to the state or a long-time resident, read on for the answer.
Every real estate transaction is packed with a series of legal, financial, and administrative processes, each with its own associated fees. Cumulatively, these are known as closing costs. Some closing costs, like credit checks and courier fees, can be as little as $50 to $100. Others, like attorney fees and real estate commission fees, can amount to thousands of dollars. But it’s worth noting that each of these costs, big or small, plays a crucial role in the process of buying or selling a home.
Just as every real estate transaction will feature unique closing costs, there are nuances to every state’s closing costs. This is due to regional variations in tax policies and market conditions, and even things like local climate can play a role.
As of summer 2024, the average closing costs paid by Florida buyers and sellers amounted to 2.3 percent of a home’s sale price. Considering the average sale price was just over $400,000, this can mean over $9,000 in closing costs alone (not including realtor fees and commissions).2
Let’s take a closer look at some common closing costs in Florida:
Closing costs begin to accumulate at the very beginning of the homebuying journey. When a mortgage loan application is submitted, potential borrowers pay a one-time loan origination fee to process the application. Loan origination fees range from .5 to 1 percent of the home’s total value. In Tampa’s Pasco County, where the median home price is $340,000, this can mean anywhere from $1700 to $3400.3
As the process of buying (or selling) a home continues, more closing costs begin to emerge. Lenders will generally request home inspections and appraisals to ensure a property is what it appears to be on paper before they decide to fund a loan for the full asking price. However, while these two processes typically go hand in hand, understanding an appraisal vs. inspection is important, as they serve different purposes.
Home inspections allow professionals to take a closer look at a property’s internals, making sure there’s no severe damage or potential hazards that need to be addressed. The cost of a home inspection can vary, with Tampa’s averages hovering between $500 and $1,000 depending on the complexity of the home.4 Because of Florida’s high humidity and the risk of moisture-related damage, home inspections are all the more necessary to protect potential buyers from thousands of dollars in repair and replacement fees.
Home appraisals, on the other hand, simply aim to determine if the asking price of a property aligns with its real-world value. Before issuing a loan, lenders will want to be sure that the home’s value matches (or, even better, exceeds) the asking price in an effort to minimize risk. Home appraisals, therefore, will focus more on the valuable features of a home: square footage, lot size, number of bedrooms & bathrooms, and its general condition. In inland Tampa areas like Hillsborough and Polk County, amenities like swimming pools can also boost appraisal value. Across the board, home appraisals tend to be less costly than inspections, with an appraisal fee averaging around $400.
For buyers and sellers, property taxes can also contribute to overall closing costs. And given Florida’s recent surge in popularity, these fees can make up a greater portion of closing costs than ever before. From 2021 to 2022, many parts of Tampa and surrounding Florida counties saw double-digit increases in property taxes, including Pasco County, Pinellas County, Polk County, Osceola County, Hernando County, and Hillsborough County. The exact impact taxes will have on closing costs can be tricky to calculate, as the amount owed will fluctuate depending on when in the month the closing takes place. Fortunately, a real estate professional will be able to help you calculate your share prior to closing.
Before the ownership of a home can change hands, a title search must be conducted to determine its rightful owner. In most cases, that owner is the seller (or the seller’s lender). Occasionally, however, a title search will reveal that there are other individuals with ownership claims or tax liens on the property that may prevent a sale from going through.
But even if a title search comes back clean, ownership claims may still arise in the future. Title insurance protects against this, covering any legal costs that come with such a dispute. The fee for a title search is generally around $100, but the coverage that title insurance provides can be a bit more costly. Fortunately, title insurance is regulated in Florida, and the fixed cost is $5.75 for every $1,000, or $1,955 for a $340,000 home in Pasco County.5
The last major Florida closing cost buyers and sellers will have to look out for can also be one of the heftiest. Many lenders require homeowners insurance premiums to be paid at the time of closing to provide coverage for the following year. Given Florida’s storm-friendly climate, this closing cost tends to be higher than most other parts of the country, and the average homeowners insurance in Tampa, Florida, ranges from $2,300 to $4,500 at closing.6
It’s important to note who typically covers closing costs. Many closing costs are associated with the beginning of homeownership, but sellers are not without their fair share of closing-related expenses. In fact, it’s not uncommon for seller closing costs to exceed those of buyers, largely due to the impact that real estate commissions can have on closing costs.
It’s also worth noting that while closing responsibilities are generally divided between buyers and sellers, there are a few instances where these responsibilities can shift. The biggest causes of these shifts include:
Keep in mind that while you may have dodged buyer costs as a seller, if you’re planning to purchase a home after selling your current property you’ll likely soon be responsible for buyer-side closing costs—doubling or even tripling the closing fee.
As demonstrated above, sellers can become responsible for buyer closing costs and vice versa for several reasons. Whether you’re looking to reduce your seller closing costs or a buyer hoping to cut back on some of the many expenses of buying a home, understanding closing costs and how to control them will be crucial. Here are four tips to help you negotiate and lower your closing costs.
The ever-fluctuating nature of the housing market has seen shifts from so-called “buyer’s markets” to “seller’s markets” and back again. While it can be challenging to time your sale just right, leveraging favorable market conditions can give you the negotiating power you need to reduce your closing costs. Let’s say you’re a seller, and low housing inventory has created a competitive environment for buyers. To close a deal, you may be able to transfer some of your closing responsibilities to your buyer, including those costly real estate fees. If you find yourself in a housing market that benefits you, do your best to use these conditions to your advantage, no matter which side you’re on.
Looking at a printed outline of your estimated closing costs, you may feel like the final word on the matter has been spoken. In reality, many of these lender-established costs are using estimates from lender-preferred vendors, meaning you may find better rates elsewhere. Using your lender’s rates to compete for a more favorable deal can help you save hundreds or even thousands of dollars at closing.
Certain closing costs, like prorated property taxes and mortgage interest, are based on when in the month and year you end up closing. Choosing to close later in the month can help you save, since your daily interest fees have only a few days to accumulate rather than several weeks.
What if you didn’t have to pay closing costs at all? When you opt for a no-cost closing, this big “if” becomes a reality, but there is still some cost to this route. Rather than paying out of pocket at the time of closing, you pay more over the course of your mortgage via an inflated interest rate. So, while you might enjoy the initial savings that come from a no-cost mortgage, you’ll have to decide if it’s worth paying thousands more in mortgage payments over a 15- or 30-year term.
The above tips prove that there are alternatives to paying full price for closing costs. But if you’re a seller in Florida, you’ll find that a smart way to dramatically reduce your closing costs while cashing in on your valuable home equity is through our sell-and-stay transaction.
Our option differs from an everyday home sale in a few key ways. For one, it allows you to sell your home and remain in place as a renter, paying rent instead of a mortgage and freeing yourself from the many responsibilities of homeownership. It also eliminates the need to purchase another home after selling your property, thus saving you thousands of dollars in closing costs that come from being both a seller and a buyer. Lastly, it means that you don’t have to pay even more to pack up your things, store them, and move. All your belongings are exactly where you love them. In addition to all of the above benefits, you trade the unpredictability of selling on the market for a smooth, straightforward closing process and 5.5% standard transaction fee.
Upon selling your home to Truehold and accessing your home equity, your opportunities are endless. You can kick back, relax, and enjoy your time as a renter. With a Tampa sell-and-stay transaction, you can leisurely search for your next home, giving yourself the time to find the perfect spot. Or you can give your retirement fund the boost it needs to become your travel fund. It’s your hard-earned equity, and how you enjoy it is entirely up to you.
Learn more about the benefits of renting vs. buying in Florida.
While closing costs can be a sizeable expense for any seller, it’s clear that our sell-and-stay transaction can do so much more than help you reduce the cost of selling your Tampa home. To learn exactly how our sell-and-stay option can make life in the Sunshine State even brighter, connect with one of our trusted representatives today and get an offer on your home within 48 hours.
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