Closing costs in Florida

Buying or selling in Florida? The type of property and the county it's in will determine your closing costs.

Last updated:

Closing costs are inevitable when you’re buying or selling a property. And in Florida, the amount you’ll pay depends on both the property and the county it sits in. As a buyer, you’ll have to cover most of the fees and taxes – and you can expect to pay between 1.86% to 2.79% of the total purchase price before taxes in closing costs.

Since many Canadian buyers pay for their US properties in cash, it’s possible to avoid some closing costs. But if you need a mortgage, this won’t be the case.

Average closing costs in Florida

The average closing costs in Florida come to approximately 1.98% of the purchase price. It may seem insignificant, but the amount you have to pay can quickly climb if you’re buying an expensive home.

Across the state, the average home sells for somewhere between US$200,000 and US$300,000. If you buy a property in that range, expect to pay between US$1,620 and US$2,430 in closing costs before taxes. That amount accounts for appraisal, settlement and recording fees, along with title insurance and flood certification — which is required by the state of Florida.

Other fees

In Florida, you’ll also have to post a fee for documentary stamps (or doc stamps), which is a percentage of the sales price. Then there are the taxes. You’ll likely be subject to property and transfer taxes — and when you add those in, you’re looking at around US$5,585 in closing costs after taxes.

Remember, these averages are based on sample data. Your closing costs may vary based on your lender, the size of your loan and whether or not you’re paying in cash.

Down payment and exchange rates

Since you’re buying property in the US, most Canadian mortgage lenders will require that you put at least 20% down on your new American home, as well as have enough cash on hand to pay the closing costs. Exchange rates (and possible exchange fees) will apply when transferring your down payment and closing costs, so you’ll need to consider this additional cost.

Once you send your down payment and closing costs, most Canadian mortgage lenders will allow you to pay for your US property in Canada dollars – which means you can avoid the exchange rate on your ongoing monthly mortgage payments.

Who pays closing costs in Florida?

In the State of Florida, the closing costs are divided between the buyer and seller – but it’s not an even split. The buyer pays the bulk of the fees and taxes. Closing costs will also vary slightly between counties.

Who pays for title insurance in Florida?

Title insurance works a little differently in Florida. In Sarasota County, Collier County, Miami-Dade County and Broward County, the buyer pays for title insurance and chooses the title company. In all other counties, it’s the seller’s responsibility.

How do Canadians get a mortgage for a US property?

Most Canadian mortgage lenders, including online lenders, banks and credit unions, will allow Canadians to take out a mortgage on a US property. What’s more, you can pay your monthly payments in Canadian dollars, which helps avoid exchange rate fluctuations and exchange fees.

Instead of taking out a mortgage on a US property, some Canadians use the equity in their current home to pay for their new US home in cash. With this option, you could potentially take out a home equity line of credit (HELOC) or a home equity loan on your Canadian residence.

What to know about buying a condo or co-op in Florida

Condos

To buy a condo, you’ll need to qualify for a mortgage. Many Canadian mortgage lenders are willing to offer mortgages to Canadians looking to purchase property in the USA. When you purchase an individual condo, you’ll receive a real estate deed and be responsible for paying property taxes.

Condos are regulated by the Florida Condominium Act. The legislation lays out your rights to the property and gives you an “undivided interest” in all the common areas of the building. You’ll have to pay a monthly maintenance fee or a yearly homeowners association fee to cover the servicing of those areas that fall under the “undivided interest.” The fee isn’t tax-deductible.

Co-ops

If you buy a co-op, you won’t own that physical piece of property. It’s more accurate to say you buy into a co-op. You’ll become a shareholder in the corporation that owns the building and, in return, get an exclusive leasehold on your unit.

Typically, the larger your co-op unit, the more shares you own. Instead of a mortgage, you’ll need to take out a home loan to finance the purchase of a co-op. A mortgage is a loan that’s secured with your property. The borrower owns the property, and pays it off over time. With home loans, the lender advances the funds to purchase the property in full. As a Canadian buyer, it may be more difficult to find a mortgage lender willing to offer a home loan.

Unlike in New York, the co-op ownership documents in Florida aren’t consistent across properties. This can cause confusion and make it more challenging to close on co-ops. In some cases, as an owner, you’ll simply get stock in the building. In others, you’ll get stock plus a proprietary lease, or an “occupancy agreement.”

Bottom line

Closing costs can vary depending on where you live in Florida, the type of property you buy and how much it sells for. While the seller forks over some money, the buyer pays for the bulk of the fees and taxes, which typically add up to 1.98% of the average sale price. You’ll need to monitor and factor in the exchange rate between Canadian and American dollars as well, in order to ensure you exchange your money at the most favourable rate you can.

Keep your closing costs as low as possible by comparing brokers, attorneys and mortgage lenders. Remember that you’ll need to find a lender that allows Canadian buyers to take out a mortgage for an American property.

Frequently asked questions

Was this content helpful to you? No  Yes

Read more on this topic

Ask an Expert

You must be logged in to post a comment.

Go to site