For decades, Florida has served as a top retirement destination. However, the state's interminably rising population represents more than just seniors looking for a sunny place to enjoy their post-working years. New residents across all age brackets are streaming into Florida, attracted by beaches, warm winters and the lack of a state income tax.

A housing bubble in Florida during the late 1990s and early 2000s inflated prices at a breakneck pace, which gave rise to a flurry of speculative building. When the market tanked in 2008, new houses and condos sat empty all over the state, with the excess supply sending prices tumbling. Since 2011, Florida real estate prices have stabilized and begun to rise again, as demand to live in the state has not abated.

Although housing is getting expensive in certain areas of the state in 2018, plenty of Florida homes are still available at prices that are reasonable for a middle-class family. The median price for a home in the state, at $224,600, is just slightly higher than the national average of $216,700. But closing costs in Florida are still fairly high when compared to the national average.

Average Closing Costs in Florida

The average closing costs for a $200,000 home purchase in Florida are $2,206. The state as the 11th most expensive closing costs. New York, Hawaii and Delaware are the most expensive with more than $2,300 each, while Oklahoma, Wisconsin and South Dakota were the cheapest, with each posting below $1,850. The national average for closing costs was $2,084.

In 2018 in Florida, the average origination fees paid to the lender totaled $1,050, while third-party fees averaged $1,157 for a total of $2,206. 

What Goes Into Closing Costs

Closing costs in Florida come from two main sources: the bank or mortgage lender providing the funds to close and the host of additional third-party entities involved in the transaction.

Lenders charge a fee for their time and expertise, and some have additional charges for specific paperwork. Non-lender charges come from home appraisers, closing attorneys, title insurance companies, property surveyors and other such professionals whose services are often required in a real estate transaction.

In Florida, the majority of closing costs are paid to the lender. More than $1,000 of the closing costs on average accrue to the lender. This is a boon to cash buyers. Since they have no need to involve a bank or lender, they often receive more than a 50% discount on closing costs in Florida.

Lender Closing Costs

The lender's origination fee represents its largest average closing cost in Florida. This is the fee that the lender charges for its services. Origination fees have come down substantially since the Wild West mortgage days of the 2000s. In Florida, these fees average under 1% of the loan amount.

Additional lender fees in Florida may include a document preparation fee and a tax services fee, neither of which should amount to more than $100.

Non-lender Closing Costs

Since the unique terms and conditions of a real estate transaction dictate the specific services required, non-lender closing costs in Florida vary more than lender closing costs. The following non-lender costs represent the most common ones, but not all of them apply to every real estate transaction in the state. And some of these costs may be negotiable. 

The appraisal fee tends to be the most expensive non-lender closing cost in Florida. Most lenders require a home appraisal to ensure that they are not lending more money on a property than it is actually worth. Cash buyers can avoid this charge, though many choose to have an appraisal anyway for their own protection. Home appraisal costs in Florida in 2018 averaged $436.

Many lenders also require a property survey to verify the exact boundaries of the property lines. The charge for this service usually runs at about $371. The real estate attorney or title company representative who executes the transaction and transfers the title from the seller to the buyer receives a settlement fee, which also averages from $434 in Florida.

Whether the lender requires it or not, a home inspection is worth the small cost. The inspector checks for structural integrity and the presence of termites and other pests.

Additional small non-lender closing costs may apply, including a courier fee, a credit report fee and a flood certification fee. These fees should be under $100 each.

The Bottom Line

Florida is one of the most expensive states in the country when it comes to closing costs. If you're a cash buyer, consider yourself lucky. Since lender fees are roughly half of the closing costs, you'll be able to give yourself a 50% discount. But if you're one of those buyers who have to take out a mortgage, you may be hit with the full cost of closing on a home. So it's a good idea to do your homework and see where you may be able to negotiate and save yourself some money once the deal is done. 

Georgia (GA): Average Closing Costs

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