Who Pays Closing Costs in a Home Purchase?

A stack of hundred dollar bills on a table with a house and a for sale sign

Buying a house is one of the most important purchases you may make in your lifetime. It will likely be where you’ll spend a lot of time, too. It’s essential to consider every factor before jumping into a home purchase, and that includes closing costs. Even if you’ve purchased a house before, you might be wondering who pays closing costs.

The team at Leading Edge Title is here to help make the transition into your new home as smooth as possible. This article aims to define closing costs, explain who pays the closing costs in Florida, and lay out the expected closing costs for buyers and sellers. Don’t get caught paying unexpected costs while purchasing or selling your Florida home. If you need assistance throughout the home sale or purchase process, contact the team at Leading Edge Title.

Don’t be surprised at the extra fees and costs that come with your home purchase. Read on to find out who pays closing costs in Florida!


What Are Closing Costs?

Closing costs are the fees or expenses paid when buying or selling a home. These costs include loan origination fees, title insurance, and appraisal fees. Closing costs are fees associated with the sale of a house that the buyer and seller must pay at the transaction’s closing. Closing costs vary depending on the loan used to purchase the home and the property’s location. Buyers must understand what closing costs they may be responsible for to ensure they have enough money saved up for their purchase. Sellers should also be aware of the closing costs they will incur throughout the home sale process.


Who Pays Closing Costs in Florida?

Depending on the terms of the real estate contract, closing costs in Florida can be paid by either the buyer or the seller. Buyers and sellers should be aware that closing costs in Florida can add up to thousands of dollars and should budget accordingly. In 2021, the average closing costs in Florida came to $8,554, according to mortgage technology company ClosingCorp. That’s no small chunk of change.

A real estate agent reviewing a contract with a potential home buyer


What Are the Closing Costs for Buyers in Florida?

Closing costs are a necessary part of the home-buying process. As a potential buyer, a rough estimate of these costs must be kept in mind throughout the buying process. Knowing the ins and outs of closing costs in advance can help you plan your budget accordingly and ensure you have enough money to purchase your new home.

Overall, buyer closing costs typically fall between 2.5% and 3.5% of the home’s purchase price. However, fees and expenses do vary widely based on your city. The following is a list of some of the more common expenses buyers have to pay for in their closing costs.

Appraisal Fee

The appraisal fee is for the initial appraisal to assess the home’s value. Most title agencies and loan providers prefer that the house be appraised before agreeing to supply a loan. The appraisal fee will fall anywhere from $200 to $800 but is typically no more than $500.


It’s common to have a survey done on a piece of property before the purchase can be finalized. The survey will show where the piece of property is actually located, and is required in order to get a Florida Form 9 Endorsement, which is part of your title insurance and often required by lenders. The cost of a survey depends on the property itself, but a standard lot usually costs around $275.

Credit Report

Most loan companies will need to assess the buyer’s credit before agreeing to a loan for the home. The credit report will typically cost $50 to $75.

Loan Origination Fees

A loan origination fee is a fee charged by lenders to process a new application. These fees can fall from 0.5% to 1% of the home’s sale price.

Home Inspection

A home inspection is one of the most necessary parts of the home-buying process for buyers. Most loan providers will only supply a loan on a home with an inspection. Expect to spend between $350 to $500 on a home inspection.

Recording Fees

Recording fees can vary widely based on the city, state, or local government in which the home is being purchased. Typical recording fees in Florida start at $50 and can go up to more than $300, depending on the municipality.

Wood-Destroying Organism Inspection (WDO)

Many lenders in Florida will require a WDO inspection before agreeing to a loan for the property. If you aren’t sure whether or not you’ll be required to pay for a WDO, get in touch with a few lenders in the area. A WDO typically costs anywhere from $75 to $400.

A For Sale sign in front of a Florida home


What Are the Closing Costs for Sellers in Florida?

Selling a home in Florida can be expensive, and closing costs are an important cost to consider. Closing costs are fees associated with the sale of a house that the seller must pay at closing. In Florida, these fees can add up quickly and vary depending on where you live and loan type. Understand these costs so you can budget accordingly.

Title Search Fee

The title search fee is paid to the title agency for the title search process. This process helps uncover any property claims, such as liens, legal claims, or taxes owed on the property. Depending on the property type, title search fee costs can range from $50 to $1,500.

Title Insurance

Even the best title agents might not find all of the problems associated with a title when searching through the records. With title insurance, you’ll be protected should an issue with the title pop up after you have purchased the home. The title insurance cost depends on the sale price of the home, and typically ranges between $5 and $5.75 per $1,000.

Real Estate Commission

This is the commission paid to the real estate agents working for the buyer and seller. A seller should budget for up to 6% of the purchase price.

Documentary Stamp Tax

When real estate ownership changes hands, it incurs a documentary stamp tax, also called a transfer tax or documentary transfer tax. This is typically a percentage of the sale price and is calculated as the sale price divided by 100 and multiplied by .7.

Promissory Note

A promissory note is a document that contains a written promise between the buyer and seller regarding the real estate transaction. The promissory note is used as a formal agreement between the two parties. Drafting a promissory note can cost anywhere from $200 to $600.

Intangible Tax

The intangible tax is a local tax based on gross earnings received on intangible property. Simply put, it is a tax paid to the State of Florida and calculated by multiplying the promissory note price by .002.

Property Taxes

Since most property taxes are paid at the end of the year, the seller must backpay the property taxes for the part of the year they were in the home.

Wood Destroying Organism

While this is typically a buyer cost, those using a VA loan are exempt from paying this closing cost. Therefore, the seller will be required to pay this fee. A WDO typically costs anywhere from $75 to $400.

Two people shaking hands over a real estate transaction



It is crucial to understand who pays closing costs in Florida and what those costs include so buyers can make an informed decision when buying a home. Sellers must know the fees they’ll be responsible for paying at the home’s closing, so they aren’t ill-prepared. Closing costs vary widely based on several factors, such as the home purchase’s municipality, the home’s price, and taxes. If you’re hoping to estimate your closing cost fees, it’s best to use caution and plan for fees on the higher end of the fee range.

Whether you’re looking to buy or sell your home, the team at Leading Edge Title can help! The dedicated title experts have helped countless buyers and sellers through the confusing closing process. Reach out today at Leading Edge Title for more information.

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