Most people know that there are ongoing expenses that come with owning a home. In Florida, there is a property tax, though it isn’t as steep as the one Texas charges. Home owner’s insurance rates are among the highest in the country thanks to all those hurricanes. Everyone has to deal with ants, termites, broken windows and yard maintenance. But we know to take those costs into account when owning the home. However, most are less familiar with all the costs involved in the purchase of a new home. What is the real cost of buying a home?
Florida Realtor Fees
The average realtor’s fees for Coral Gables real estate for example, is five to six percent of the property’s value. Know that many realtors will lower their offer for a home if you’re trying to sell the home yourself to avoid the realtor’s commission. This means the offer on the home will be several percent lower when you attempt a “for sale by owner” or FSBO transaction. Conversely, a realtor can help you sell the home much faster by tapping into a larger network and using a variety of marketing tactics.
Closing Costs in Florida
Closing costs are the fees you pay to close or complete the deal on the mortgage. These fees can range from two to seven percent of the price of the home. These costs may be split between the buyer and the seller. The only way out of it is to pay cash for the home, and then you still have to pay a variety of legal fees. For example, a real estate attorney should review every purchase agreement. That is especially true if you’re receiving seller financing. Closing costs will include title insurance, as well. If you’re taking out a mortgage, there will be a loan origination fee.
Closing costs should include pre-paid property taxes and homeowner’s insurance. Then you’re not liable for coming up with the entire 6,000 property tax payment though you bought the house in October. It is still your responsibility to pay the property tax bill and homeowner’s insurance bill when they come due. If you are buying a house with a mortgage, you’re legally required to get homeowner’s insurance to protect the lender’s investment.
Every home needs to be appraised. While there is a modest fee to have the home appraised, you want this so that you don’t offer more for the home than it is worth. A different cost you may pay is the fee for any professional assessment the property needs. For example, you probably want an engineer to review drainage issues and foundation damage. This can save you from buying a house with cracked walls that actually needs 50,000 dollars of foundation repairs.
Home inspection fees and appraisals will be done, and that’s part of the costs paid at closing. If you want a different inspector to check out the electrical wiring or determine the severity of the mold problem, you’ll have to pay extra and out of pocket for that.
You’re the one who will have to pay to clean up the property if that’s not part of the terms of the purchase agreement. For example, cleaning the pool and cutting the grass are probably your responsibility when you move in. If this is covered by the Home Owner’s Association or HOA, you’ll be liable for paying the HOA dues, though these fees would then be given to you at closing along with prorated amounts for insurance and taxes.