Buyers and Sellers spend a great deal of time negotiating the best price when contracting for real estate. However, they often overlook payment of the closing costs when agreeing to the final price.
The following is an example of how closing costs are allocated by a “standard” real estate contract in a residential closing. Assume a purchase price of $200,000.00, and a loan of $140,000.00.
The Seller typically pays the following closing expenses:
|a. Documentary stamps on the deed ($7.00/$1,000.00):||$ 1,400.00|
|b. Title search and premium:||$ 1,275.00|
|c. Real estate commission (6%):||$ 12,000.00|
|d. Closing agent fee and miscellaneous:||$ 500.00|
The Buyer typically pays the following closing expenses:
|a. Mortgage stamps and intangible tax ($5.50/$1,000.00):||$ 770.00|
|b. Loan title charges:||$ 700.00|
|c. Closing agent fee and miscellaneous:||$ 500.00|
|d. Survey:||$ 350.00|
|e. Loan fees and costs to lender:||$ 2,000.00|
While this is how the typical “standard” Florida real estate contract allocates costs, there is nothing that mandates these allocations. Just as you negotiate the price, you can negotiate payment of the closing costs. You do not have to agree to something just because it is that way on a pre-printed form. After all, it is your money being spent!
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