What am I Responsible For paying at Closing
The Florida Realtors-Florida bar (FAR-BAR) is the state’s residential contract for sale and purchase. It is the current authorized version of the form issued by the joint committee of Florida Realtors and the Florida Bar. This officially licensed form may be used by real estate brokers, attorneys, investors, buyers, and sellers.
Buyers and sellers of properties are often confused as to which fees are required to be paid by which party. I’ll try to simplify it here.
Specifically, paragraph 9 of the contract lays out some of the expenses and explains which side is responsible for the various closing costs. But, unfortunately, the answers are not cut and dry, and depends on which side chooses the closing agent.
Paragraph 9(a) covers costs that will be paid by the by the seller. Paragraph 9(b) lays out the costs that will be paid by the buyer.
However, the FAR-BAR contract determines which side pays various costs depends on which box is checked in paragraph 9(c) regarding title and insurance. In this regard, 9(c) provides three optional boxes, one of which must be checked.
If box 9(c)(i) is checked, the seller chooses the closing agent and must pay for the owner’s policy and charges. The buyer pays for the costs associated with the with the buyer’s lender.
If 9(c)(ii) is checked, the buyer chooses the closing agent and pays for the owner’s policy and charges, in addition to the to costs associated with the buyer’s lender.
Box 9(c)(iii) is a regional provision only for the Miami-Dade/Broward area and divides the costs differently between buyer and seller.
When deciding which option to choose, the parties should refer to paragraphs 9(a) and 9(b) to determine what each side is responsible for payments associated with the transaction.
For example, if box 9(c)(ii) is checked, the buyer can refer to paragraph 9(b) and see that the buyer is responsible for the owner’s policy, charges, any municipal lien search fee, and other costs that are always paid by the buyer.
However, if 9(c)(i) is checked, the seller pays for those named costs.
This means that the decision of which box to check in paragraph 9(c), is very important. This is one reason it is very important to choose a seasoned and knowledgeable realtor to represent your interests at the closing table.