When you are preparing to sell a home, the sales price is only one part of the financial picture. The number that really matters is how much money you expect to receive after the mortgage, closing expenses, credits, and other deductions are paid.
The short answer is that Pensacola area sellers may pay real estate brokerage compensation, Florida documentary stamp tax, title and settlement expenses, property tax prorations, mortgage payoff charges, association fees, repairs, and any buyer concessions negotiated in the contract.
There is no single closing cost percentage that applies to every sale. Your final expenses depend on your contract, sales price, mortgage balance, property type, association, negotiated terms, and which party agrees to pay each item.
Real Estate Brokerage Compensation
Real estate compensation is negotiable and should be clearly explained in your listing agreement.
Your agreement will identify the compensation paid to your listing brokerage. A seller may also agree to offer compensation toward the buyer's real estate representation or provide a concession that the buyer can use toward allowable expenses. These are separate decisions that should be evaluated as part of your pricing and negotiation strategy.
Before listing, ask for an estimated seller net sheet showing how different offers could affect your proceeds. A higher offer is not always the strongest financial offer if it includes substantial credits or other costly terms.
Florida Documentary Stamp Tax
Florida generally charges documentary stamp tax when an interest in real property is transferred.
For properties in Escambia and Santa Rosa counties, the current rate on a deed is 70 cents for every $100, or portion of $100, of the consideration. For example, the documentary stamp tax on a $400,000 sale would generally be $2,800.
The purchase contract determines how expenses are allocated, but this tax is commonly shown as a seller expense in a traditional Northwest Florida transaction.
Title Insurance and Settlement Expenses
An owner's title insurance policy protects the buyer from certain covered title problems that existed before the purchase.
Florida regulates title insurance rates. The Florida Department of Financial Services currently provides an example showing that the base premium for a $100,000 owner's policy is $575. The premium rises as the amount of coverage increases.
Whether the seller or buyer pays for the owner's policy depends on the contract. Many Pensacola area transactions place this expense on the seller, but that is not automatic and it can be negotiated.
Additional title and settlement charges may include:
- Title search and examination
- Closing or settlement services
- Document preparation
- Municipal lien or permit searches
- Courier, wire, or electronic recording services
- Recording fees for applicable documents
Escambia County's clerk currently lists a recording fee of $10 for the first page and $8.50 for each additional page. The clerk also provides a deed and mortgage recording fee calculator.
Mortgage Payoff and Lien Expenses
Your remaining mortgage balance is not technically a closing fee, but it is normally one of the largest deductions from your proceeds.
The title or closing company will request an official payoff statement from your lender. That amount may include:
- Remaining principal
- Interest through the payoff date
- A payoff statement fee
- Recording or release charges
- An early payoff fee, if your loan contains one
Any other liens, judgments, unpaid assessments, or approved home equity balances may also need to be resolved before the buyer can receive clear title.
Your online mortgage balance may not equal the final payoff amount, so use an official payoff when estimating your proceeds.
Property Taxes and Association Charges
Florida property tax bills are generally sent in November for the current tax year. Taxes and certain assessments are usually prorated through the closing date according to the contract.
If the home belongs to a homeowners or condominium association, the seller may also encounter:
- Estoppel or account verification fees
- Transfer or application fees
- Unpaid dues
- Special assessments
- Prorated association charges
Responsibility for these items depends on the association documents and purchase contract. Condo sellers in Pensacola Beach, Perdido Key, Gulf Breeze, and other coastal communities should investigate assessments early instead of waiting until closing.
Repairs, Credits, and Buyer Concessions
A seller's estimated proceeds can change after the home goes under contract.
The buyer may request repairs following an inspection, or the parties may negotiate a closing credit instead. The contract could also include a home warranty, contribution toward the buyer's closing expenses, or another seller-paid item.
These expenses should not be considered separately from the offer price. I like to compare the complete financial result so my sellers can see what each offer may actually put in their pocket.
Moving and Preparation Costs
Some costs occur before closing and will not appear on the settlement statement.
These may include cleaning, landscaping, staging, photography preparation, minor repairs, storage, moving services, or temporary housing. While they are not official closing costs, they still affect your overall proceeds and should be included in your selling plan.
How to Estimate Your Net Proceeds
Before you list your home, gather:
1. Your approximate mortgage balance
2. Information about any second mortgage or home equity account
3. Current association dues and assessment information
4. Your expected sales price
5. Any likely repair or preparation expenses
6. The compensation and concessions being considered
Your Realtor and title company can then prepare an estimated seller net sheet. Ask for more than one version if you are comparing different prices or concession amounts.
The estimate will not be exact until you have a contract and final closing figures, but it can help you make better decisions before accepting an offer.
If you are considering selling in Pensacola, Cantonment, Beulah, Pace, Milton, Gulf Breeze, Perdido Key, or Pensacola Beach, I would be happy to prepare a personalized estimate and help you understand the numbers before your home reaches the market.
