It takes time to get things ready for a real estate closing. Before getting to the point of transferring a property title to its new owner, you need to evaluate that title with an eagle eye. On top of that, many other assets also need to be validated, starting with the property itself.

Real estate transactions are complex in all parts of the country, but it helps to know the market you’re working with, from its laws to the way buyers and sellers split the closing costs. Today, our title and escrow specialists will go over the costs of title transfer in Florida real estate transactions.

What’s a Property Title?

A title serves as the main proof of ownership over a real estate property. It gives legal owners the right to use and dispose of a property as they please, and any limitations are outlined in the document. A title should also list all previous transfers, leaving no room for error during a real estate transaction. Buyers, lenders, and real estate agents can check that the seller has the right to make the transfer while ruling out ownership disputes.

A title transfer marks the completion of a real estate transaction, and it follows a thorough review process involving buyers, sellers, and their own team of realtors, lawyers, and title and escrow services.

What Are Closing Costs?

Closing costs are expenses that are apart from the property’s purchase price, all of which must be paid before the closing date. Sometimes, they’re added to the property’s costs, or the person can choose to pay them separately.

These costs are usually split between buyer and seller, with the latter usually handling municipal fees and unpaid property taxes. Keeping tabs on all the closing costs can be difficult, so many people choose to have them rolled into a no-cost mortgage, basically increasing the loan interest in exchange for having the amount covered by the lender beforehand.

Closing commissions cover the costs of all the services involved in making the closing as smooth as possible, adhering to the contract conditions and local laws.

• Property taxes: The seller needs to take care of all unpaid taxes pending on the property before closing.

• Realtor commissions: This percentage goes to the real estate agents hired to oversee the process. In most cases, the buyer and the seller hire their realtor separately. Each of them can compensate the realtors in the same manner, but it’s not rare for sellers to cover both commissions.

• Attorney fees: Similar to the case above, this refers to the commissions set by the escrow attorneys overseeing the assets required during the closing.
  
  
• Property inspections: Buyers and sellers can agree to add these costs to the closing fees instead of having the repairs made before settlement.

• Homeowner’s association (HOA) fees: These are also included during the closing, usually through a document specifying the owed amount at the time of the transfer.

• Escrow fees: These costs result from an escrow account that’s protected by the real estate company in the time leading up to closing. This service ensures that the client’s money is guarded by a neutral third party.

• Recording fees: Each Florida county charges a certain amount corresponding to the number of documents going on record during the sale.

Title Transfer Fees

Title transfer entails more than passing the ownership from seller to buyer; it involves a series of preliminary steps that can’t be separated from the closing costs.

First, a title examination addresses discrepancies in the title and rules out any legal problems. Title searches must be completed before the transfer, giving time to resolve any issues concerning liens, claims against the property, or fraudulent practices that could potentially dissolve the transaction. Given all the issues that could arise, title searches are usually conducted by a title and escrow company.

Then, you need to add the costs of title insurance, which is in turn affected by the sales price, the costs of an existing owner’s insurance, etc. Insurance coverage protects the new owner from claims and ownership disputes. Title insurance is meant to save owners the cost of issues that go unaddressed during the purchase, generally concerning problems outside of the seller’s knowledge.

Because these prices are set by the state government, the standard practice in Florida counties has the seller covering these costs. This is also the case for the payment of transfer taxes, meaning the stamp taxes that record the transfer of a property to its new owner. An article by Clever states that Miami-Dade boasts lower transfer tax rates in relation to other Florida counties, where rates sit at 70 cents per $100.

So, the most common approach is for the seller to pay for the title transfer, but the relevant parties can discuss any potential changes during the closing negotiations, with buyers and sellers sometimes splitting the title fees fifty-fifty. The contract should clearly designate who’s in charge of paying the closing costs depending on what’s agreed upon during the closing negotiations.

The specialists at Key Title & Escrow make sure that no loose ends damper your day during a closing. We handle all relevant title and escrow services, using years of experience and the latest resources to the fullest. This also means keeping track of all requirements and payments without letting anything slip our notice. Save yourself some stress and call (305) 235-4571 or toll-free at (800) 547-0006. You can also fill out the contact form on this page to get more information. Let us handle the most challenging parts of the process and make the best of your real estate transaction.