Who Pays Closing Costs in Palm Beach County Florida?
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2021WHO PAYS CLOSING COSTS IN PALM BEACH COUNTY FL
It is important to understand all closing costs in Palm Beach County FL before selling or buying a home. While budgeting for a home purchase or sale, closing costs must be taken into consideration. The seller is responsible for certain expenses, and the buyer is accountable for others. However, it is important to note that most are negotiable. To have a successful, stress-free, smooth closing, it is necessary for both the buyer and seller to fully understand the responsibilities that need to be completed before the sale is finalized. The more educated you can get, the better! Being a proactive, prepared home buyer or seller will allow you the grace and skillset to easily navigate through any unexpected issues, changes, or costs.
THE GIST
In this write-up, we will go over closing costs in Palm Beach County, FL. We will go over the significant extra charges necessary for due diligence procedures throughout a home sale closing in Palm Beach County, Fl. Although many are negotiable, this article will list what the seller and buyer each generally pay for. A common question that we will examine in detail is, who pays title insurance in Palm Beach County. After this, we will illustrate the options for closing agents, either a Real Estate Attorney or Title Company, then we will wrap it up with a quick summary. You will be ready for your home sale adventure! It is important to remember, many charges can be negotiated. Hiring an efficient licensed realtor with a good track record is highly recommended. A realtor will go to bat for you on any negotiable closing costs.
SELLER'S CLOSING COSTS IN PALM BEACH COUNTY FL
PROPERTY TAXES
All property taxes are prorated for payment by the seller from the first of the year through the close date. This is shown on the settlement statement as a credit to the buyer. Don't forget the tax benefits of living in Florida!
FLORIDA DOCUMENTARY STAMP TAX ON THE DEED
This tax is charged at $.70 per $100 of the sale price.
RECORDING FEES ON THE DEED | COUNTY CLERK AND COMPTROLLER
This is calculated by the sale price, the number of pages, how many names are involved, and how many abstracts. This can be calculated from the Palm Beach County Clerk and Comptroller.
THE TITLE SEARCH, EXAMINATION, AND CLEAR TITLE
This step makes sure the title is clear for closing, and that the seller has the legal right to sell the home.
LEIN SEARCH
This confirms there are no unpaid amounts of money owed on the house by any creditors.
TITLE INSURANCE POLICY
This protects the home from anyone who might sue or lay claim to the title.
OUTSTANDING BALANCES
If there are any unpaid utilities or any unpaid dues to the homeowners, condo, or any other governing association.
ESTOPPEL LETTER
This is a letter from the governing association, condo, or homeowners, declaring that all payments are up to date, and there are no unpaid dues.
COMMISSION
6% of the sale price is common for real estate commission. 3% to the listing broker, and 3% to the buyer's broker. Oftentimes, a brokerage might have an additional closing fee to be paid by whomever they represent.
ADDITIONAL FEES FOR THE CLOSING AGENCY, DOCUMENTATION PREPARATION, RECORDING, SETTLEMENT COSTS, AND ANY COURIER FEES
BUYERS CLOSING COSTS IN PALM BEACH COUNTY FL
FLORIDA DOCUMENTARY STAMP TAX ON THE MORTGAGE
$.35 per $100 of the sale price.
INTANGIBLE TAX AND RECORDING FEES ON THE MORTGAGE
Costs for recording and mailing can be found at The Palm Beach County Clerk & Comptroller.
HOME APPRAISAL
This is a home valuation that creates a hypothesis as to the actual value of the property. The Palm Beach Property Appraiser provides records, information, and forms.
LAND SURVEY
A land survey creates a map of the property along with any features.
HOME INSPECTION
A third party has a look at the integrity of the home, from top to bottom. This includes everything and anything, such as the roof, attic, foundation, structural elements, electrical systems, plumbing, windows, doors, floors, and heating, ventilation, and air conditioning. After the inspection, a written report is provided.
LENDER'S TITLE INSURANCE, AND ENDORSEMENTS TO THAT POLICY
This protects the lender from any issues on the title to the property.
HOME INSURANCE
This protects your home, property, and personal property from certain damages.
ADDITIONAL FEES FOR THE CLOSING AGENCY, DOCUMENTATION PREPARATION, RECORDING, SETTLEMENT COSTS, AND ANY COURIER FEES
WHO PAYS TITLE INSURANCE IN PALM BEACH COUNTY
While closing costs are always up for negotiation, who pays for title insurance is usually dictated by county standards. Typically, the seller chooses the closing agent and pays for title insurance in Palm Beach County. In Broward and Miami-Dade County, the buyer selects the closing agent and pays for the title insurance premium. While this division of closing costs is typical, at the end of the day, the contract will determine if the buyer or seller selects the closing agent and pays for title insurance.
Take a look at Paragraph 9 of the Florida Realtors/Florida Bar Residential Contract For Sale And Purchase to determine who is paying for title insurance:
- In most cases, option 9(c)(i) will be selected for transactions in Palm Beach County. This section states: "Seller shall designate Closing Agent and pay for Owner's Policy and Charges, and Buyer shall pay the premium for Buyer's lender's policy and charges for closing services related to the lender's policy, endorsements and loan closing which amounts shall be paid by Buyer to Closing Agent or such other provider(s) as Buyer may select;"
- If option 9(c)(ii) is selected the buyer will choose the Closing Agent and pay for title insurance on the owner's title policy and the lender's title policy.
- Option 9(c)(iii) is known as the "Miami-Dade\Broward Regional Provision." This option states that the buyer shall designate the closing agent and pay for the owner's and lender's title insurance premiums. The seller is required to provide a copy of their owner's policy and pay for a tax search and municipal lien search in order to reissue coverage under the current policy.
It's important to note that the owner's title policy protects the buyer against title defects. If the buyer is financing their home purchase, a loan policy will also be required to protect the lender against title defects. While who pays for the owner's policy differs by county, it is very rare for the seller to cover the lender's title policy regardless of the county. A title insurance premium is a one-time fee and the policy is good for as long as the buyer or their heirs retain the property. The lender's title policy is effective for the life of the loan.
CLOSING AGENT DECIDED BY SELLER
Typically, the seller picks who will prepare the final settlement statement and facilitate the closing in Palm Beach County. The closing company must be efficient, organized, meticulous, and thorough. Their job is to make sure everything is cleared on the property before the title is transferred.
YOUR CLOSING AGENT NEEDS TO COMPLETE THE FOLLOWING:
ORDER TITLE SEARCH, PUBLIC RECORDS, AND REVIEW
This confirms the title is clear for the sale. This step verifies there are no judgments, liens, bankruptcies, or payoff amounts on existing mortgages. This step goes deep into the title's past and combs through looking for any irregularities. The search will find if there are any hidden obstacles such as illegal deeds, missing heirs, missing wills, forgeries, or any discrepancies on the property held from former mortgages. Any errors in public records need to be cleaned up as well.
ORDER SURVEY OF PROPERTY BOUNDARIES
A survey provides a multitude of significant information. It clearly determines the property lines and lists the details about construction done to improve the property. Other information outlined in a survey includes the location of all easements, requirements for building on the land, and it discloses to what extent portions of the land are public versus private. Even if the current sellers have one, it is best practice to perform a current land survey. The buyers may want to build add ons, make improvements, add fencing, or have a shed. An updated survey will confirm they are able to make their dreams come true. The seller or neighbors may have made problematic changes. If any alterations done by the neighbor impends over the seller's property line, this can be an issue. Furthermore, title insurances may take an older survey, but the outdated survey may negatively affect claims in the future.
ORDER PAID TAX RECEIPT AND ESTOPPEL LETTER FROM HOME OR CONDO ASSOCIATION
The closing agent will obtain a "Paid Tax" receipt from the Palm Beach County Property Tax Collector. This shows the prorated taxes for the year being paid by the seller. Palm Beach County is filled with micro-communities that have private governing bodies, either homeowners or condo owners associations. The estoppel letter confirms all payments are up to date, and there are no unpaid dues.
ALL DUE DILIGENCE FOR THE CLOSING
Closing agents are responsible for addressing most issues surrounding the closing. They are to receive and review lender documents and ensure they are properly executed and signed. Their job is to make sure the title is clear, and handle the title commitment. They dot the i's and cross the t's to make sure nothing is missed
TITLE AGENCY VS. ATTORNEY, DECIDED BY SELLER
Do your research on the closing companies you are looking into. Make sure they are reputable, have excellent reviews, and have a great track record. Have a look at what is involved with the home sale. If there are complicated situations, it may be best to have an attorney involved to cover the legal aspects. Attorneys are able to review real estate contracts, settlement statements, and any other paperwork from the legal side of it. Successful attorneys have an eye for paperwork, due diligence, and are able to draft legal documents to fit your needs. Real estate attorneys provide protection, counsel, and explanations of complicated contractual jargon.
Often times real estate brokerages may have a preferred title company. This is beneficial as if there are any issues, the title specialist is held not only to your expectations but to the entire real estate brokerage. Communication is smoother, and title companies are oftentimes backed by an attorney. Sometimes, they are less expensive than attorneys. Do your research on each company, and check with your licensed experienced realtor.
CONCLUSION
To wrap it up, we went over the administrative tasks that can add to closing costs in Palm Beach County Fl. We reiterated the importance of using a licensed realtor to help negotiate many of the costs. While closing costs are always negotiable, we pointed out that it is standard for the seller to choose the closing agent and pay for the title policy in Palm Beach County. We outlined and described the tasks needed to ensure a painless closing, illustrating the importance of due diligence. We finished up with a brief discussion on options for closing agents. You are now ready for your home sale adventure!