Closing costs are not a fixed schedule. Several of the larger lines are customary rather than statutory, which means they are negotiable, and in a developer contract several are shifted to the buyer.
This page sets out the categories and the customs. What your specific contract allocates is a question for the contract and for your attorney. Contact the desk at Miami Dossier for the current position on any building we cover.
A Florida closing produces costs in roughly six categories: taxes on the transfer and on any mortgage, title insurance and the associated search and settlement work, recording fees, prorations of taxes and association dues, lender costs where there is a loan, and association and building fees.
Who pays which is partly statutory and largely customary, and the custom differs between counties in Florida. In a resale, allocation is negotiated within that custom and set out in the contract.
In a developer contract, the allocation is written by the developer, and it commonly moves costs to the buyer that a resale buyer would not expect to carry.
We do not publish rates or worked examples, because the figures move and because a specimen calculation gets quoted back as though it were a quotation. Your closing agent will produce a real estimate for your transaction, and you should ask for one early.
Documentary stamp tax on the deed. A state tax on the transfer, calculated on the consideration. Custom on who pays varies by county.
Documentary stamp tax and intangible tax on a mortgage. Applicable where there is financing, and customarily the borrower’s cost.
Title insurance. An owner’s policy protecting against defects in title, plus a lender’s policy where there is a loan. Custom on who pays for the owner’s policy differs by county, and in Miami Dade the custom differs from much of the state.
Search, examination and settlement fees. The work of the title company or closing attorney.
Recording fees. Charged by the county to record the deed and any mortgage.
Prorations. Property tax and association dues divided between the parties at the closing date. Not a cost so much as an apportionment, but it appears on the statement and it can be a meaningful figure.
Developer contracts commonly allocate to the buyer several items a resale buyer would not carry. Developer fees or administrative charges, sometimes expressed as a percentage of the purchase price. The cost of title insurance and the closing agent, where the developer selects the provider. Utility connection and start up charges. A contribution to the association’s working capital, frequently equal to a number of months of assessments and not credited against future dues.
None of this is improper and none of it is hidden. It is in the contract. It is simply not what a buyer expects if their reference point is a resale purchase, and it is not always highlighted during the sale.
The practical instruction is to find the closing cost provision, list every item allocated to you, and ask for an estimate of each in writing before signing. A developer that answers that readily is telling you something useful, and so is one that does not.
Your attorney’s fee, which is separate and which you should want to pay. Association application and approval fees. Move in fees and elevator reservation charges. The first insurance premium on your unit owner policy. Any inspection you commission. Currency conversion costs on the funds you bring.
Individually modest, collectively not, and none of them appear on the statement the closing agent prepares.
Add them to the same sheet as the closing costs so that the total you are planning for is the total you will actually spend.
Ask the closing agent for an estimated settlement statement as early as they will produce one. They do this constantly and it costs nothing to ask.
Ask your attorney to review the contract’s cost allocation specifically, as a separate item from the rest of the review, and to tell you which allocations are unusual.
Ask the association directly for its schedule of fees, including application, approval, move in and capital contribution.
Three requests, and between them you will have a number you can rely on rather than an estimate you have inferred.
In a resale, allocation is negotiable within local custom and is genuinely negotiated.
In a preconstruction purchase from a developer the contract is generally presented as standard, and much of it is. That said, allocations do get discussed, particularly where a buyer is well advised and the discussion happens before signing rather than after.
What we will say plainly is that a buyer who does not know which items are customary has no basis for the conversation. Knowing the custom is the whole of the leverage.
Developer contracts move several costs to the buyer that a resale buyer would never carry, and the time to discuss that is before signature. Contact the desk at Miami Dossier and we will go through the allocation in a specific contract with you and put you in front of counsel to review it properly.
We hold no listings and we are not the developer. Contact the desk at Miami Dossier and we will go through the current position on any building we cover, including the parts a sales gallery would rather skip. Where a question is legal, tax or structuring, we introduce you to advisers who handle that properly rather than answering it ourselves.