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What Do You Pay at Closing When Selling a House in Palm Beach FL?

Written by Posted On Saturday, 21 November 2020 07:41

What Do You Pay at Closing When Selling a House in Palm Beach FL?

Sellers in Palm Beach FL pay around 3% of the purchase price as an estimate of closing costs. This is excluding real estate commissions. The closing costs when selling a house in Palm Beach FL include:

  • Documentary Stamp Taxes.

  • Title Search Price.

  • Condominium/HOA Association.

  • Estoppel Letter Fee.

  • Fee For the Title Company

  • Survey Costs.

  • Commission For both Realtors.

Let us take a look at all these costs in detail.

What are the major closing payments?

        1. Documentary Stamp Taxes On The Deed

A deed is a legal document that signifies the transfer of interests. For example, quitclaim deeds and warranty deeds. A deed needs to be signed and delivered. It is not required to be recorded in public records. But buyers would want to record it for two reasons: 

  • ●       To use as proof that the property is bought by them.
  • ●       To provide protection against any title claims. 

The County of Palm Beach levies a tax for recording such documents in public records. This is the Documentary Stamp Tax on the deed and is mostly paid by the seller.

What is the approximate cost?

A Palm Beach county seller will be charged $0.7 for every $100 of the selling price as the documentary stamp tax. So, if you are selling a house for $200,000, you would be charged 70 cents per $100. You will be paying a total documentary stamp tax of $1400.

        2. Title Search

In Florida, the seller has the responsibility of showing the buyer a clear title for his property. The title search is performed by either an attorney or the title company.

Title companies have experts who specialize in the real estate business. They help the seller in the title search for the property. The title companies receive a synopsis of the title. It contains details of the legal issues related to the property. For instance, it will show the property's liens, easements, and transfers of the deeds. A good title company will have expert professionals who can find out the history of the property. 

To buyers, a clean title to the property is mandatory. The seller must provide a clear and marketable title. If not, the buyer is free to reject the contract unless both parties agree otherwise.

What is the approximate cost?

The price of a title search includes the fee of the title company.

       3. HOA/Condominium Association Estoppel Letter Fee

An estoppel letter is a mandatory legal document. It is allocated by the seller's HOA (Homeowners Association). The document outlines the financial status of the current owner. It also highlights past and current fee due balances. The letter expresses the property's debts, violations, fees, and special assessments. These are generally allotted by the HOA.  

Before giving a loan to the prospective buyer, the bank would want to if there are any debts left with the HOA. They want to know the exact amount of debt. Without the estoppel letter, the buyer cannot borrow money from the bank. 

There are three possibilities that can be seen on the estoppel letter. One, there is no debt. Two, the seller must continue to pay the debt. And, three, the debt is divided between the seller and the buyer.

What is the approximate cost?

There is no fixed charge for the estoppel letter. The prices can be different for different associations. In most cases, the range is anywhere from $0 to $500. As per the law, the estoppel letter must be provided by the association within a period of 15 days.

       4. Title Fees

The title fee is the fee the seller pays for the insurance premium of the buyer’s title. It is important as it protects both the buyer and the lender in case of any problems with the title. 

There might be some problems related to the title that aren’t discovered at the time of closing. Some examples of such problems can be improper legal descriptions, forged deeds, etc. 

The Title fee acts as a cover against such problems.

What is the approximate cost?

The title fee is calculated at the rate of $5.75 per $1000 of the purchase price up to $100,000. Over $100,000, add $5 per $1,000 of purchase price up to 1 million.

        5. Survey Cost

A survey of the property is done by a professional surveyor and will show the boundaries of the property.  Since it clearly defines the exact boundaries of the seller’s property lines, it’s a good idea to have it done. These costs are legally binding and professionally certified. If there are no new constructions since a previous survey, the buyer can accept an old survey also. This will save you time as well as money.  

What is the approximate cost?

The Survey cost depends upon the size, location, history and age of the property. It might also differ among locations and professionals. In most cases, it costs anywhere from $300 to $600.

        6. Commission For Seller's Realtor

The fee of a realtor is one of the major factors to consider when selling a property. It is true that real estate transactions are negotiable. But, while selling your Palm Beach house, you will be paying a fixed commission to the realtor.

There are two types of realtors. First, a listing agent who is hired by the seller. The job of a listing agent is to list the seller's property (ies) to realtors that have potential buyers. Second is a buyer's realtor. Their job is to show the listed properties to potential buyers.

Realtors must be registered under a real estate brokerage. If not, they are running an illegal business. Additionally, a realtor may work both as the listing agent and the buyer's agent. So, they will be compensated for both the jobs. Also, the seller has to pay both the listing agent and the buyer's agent. The payment is derived from the property's sale price as the commission.

What is the approximate cost? 

Commissions for different agents:

  • Listing Agent- 2.5 to 3%
  • Buyer's- 2.5 to 3% 

This means you will be paying around 5 or 6% commission to the realtor(s). This means, if your property is sold for $100,000, the commission will be approx. $5000-$6000.

Conclusion

Selling a house can give you some stress, especially on financial terms. That’s why knowing about the closing costs can help you. 

Do you want to sell your house in Palm Beach county? Guy DeGiacinto Luxury Real Estate can make your experience better. Contact me at 561-371-8287.

I am more than happy to provide you real estate services of the highest standards.

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Guy DeGiacinto

Guy DeGiacinto | Luxury Real Estate - Your South Florida Luxury Real Estate Professional | 250 S Australian Avenue, Suite 1107, West Palm Beach, FL 33401 | 561-371-8287 | GuyDeGiacinto.com

I provide the finest real estate service for my clients, based on the highest standards of ethics, values, and service. I’m proud to work hand in hand with my clients every step of the way throughout your real estate journey.

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