REAL Exclusive Magazine

Closing Costs and Their Impact on Overseas Buyers

By Patricia Tan

I am writing this article from a cold, dreary and very gray England, where I just showcased Gulf Coast properties at a property exhibition attended by my fellow Brits who are interested in purchasing their very own place in the sun. A quick look out of the window and glance at the thermometer tells me why!

One of the questions I encountered a lot during the property show was “Exactly how much will this home cost me?” A reference to the dreaded closing costs local buyers are so used to seeing on statements when they purchase a home. This article will be published during what is traditionally one of our busiest months for closings – a time when snow bird purchases made during the winter months all come to fruition. So what better time to make a quick recap of those costs parties to a real estate transaction may be asked to pay at closing.

Coldwell Banker booth at a recent property show in England

Title insurance is one of the key costs we encounter in a real estate transaction. Who pays for this may be negotiable as one of the contract terms. The cost of title insurance is fixed, so there is no opportunity to shop around to find the best value coverage. As a general “rule of thumb” the cost of title insurance can be estimated at $550 per $100,000 of the property sales price.

Customary Seller Paid Closing Costs
1. Doc stamps on the deed are .70 per $100 ($100,000 = $700) based on sales price
2. Real estate commission
3. Payoff existing mortgages
4. Recording fee and processing fee for satisfaction of mortgage: $25 per recording
5. Taxes prorated from January 1 to date of closing

Customary Buyer Paid Closing Costs
1. Recording fees: $10 for first page; $8.50 each additional page (mortgage can range from $75-$125)
2. Doc stamps on mortgage at .35 per $100 based on mortgage amount ($100,000 mtg. = $350)
3. Intangible tax on mortgage at .002 x mortgage amount ($100,000 mtg. = $200)
4. Simultaneous issue title insurance (lender’s policy): $25
5. Buyer’s closing fee: $350
6. Endorsement charges: Around $45 each with some exceptions
7. HOA or Condo dues and application/transfer fee if applicable
8. Survey: $350 and up
9. Termite inspection: $65 – $100
10. First year homeowner’s insurance & flood insurance, if applicable
11. Mortgage Escrows: including taxes, homeowner’s insurance, flood insurance
12. Prepaid mortgage interest from the day of closing through the end of the month
13. Courier & shipping fees if any incurred
14. Loan origination fee & discount points: Depends on Lender
15. Tax service fee: around $75-$100
16. Lender underwriting fee: $250-$450
17. Flood certification: $20-$30
18. Assignment of mortgage fee: $18.50
19. Buyer’s Home Inspection: $250-$500. This will vary depending on size and construction of home, pool, and other factors.

So how do these fees stack up for buyers coming to Florida from the United Kingdom? France and Spain are the most popular destinations for British buyers looking for their home in the sun. These countries are attractive because of their warm climates and their proximity – shorter travel times are important if you have limited or shorter vacation opportunities. Costs in France vary depending upon the age of the property – they can be as low as 2% of the purchase price, or as high as 20%. In Spain, buyers expect to budget up to 15% for their closing costs.

Overall, Florida stacks up well in terms of our closing costs, but we may lose out when it comes to long travel times and rising air travel costs.

NOTE. All fees are approximate. Some apply only to transactions that include a mortgage, and other lender fees may apply. Check with your mortgage provider. For new construction contracts, additional closing costs may apply. Check with the builder.

Patricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com.

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