Some closing agents are getting greedy and charging closing fees to both, the buyer and the seller. Unlike title insurance premiums, closing fees are not set by the Florida Department of Insurance, so closing fees vary depending upon the closing agent and the transaction’s complexity. Closing fees are charged by closing agents to cover the costs connected with the closing services described below.
Under the FR/BAR Contract, if the box is checked that buyer designates the Closing Agent, then buyer pays for the Owner’s Policy and Charges. “Owner’s Policy and Charges” is defined under the Contract as owner’s title insurance premium, title search, and closing services. The FR/BAR Committee purposely used the term “closing services” in the contract because it is a defined term under Florida Statutes Section 627.7711 which is defined as follows:
“Closing services means services performed by a licensed title insurer, title insurance agent or agency, or attorney agent in the agent’s or agency’s capacity as such, including, but not limited to, preparing documents necessary to close the transaction, conducting the closing, or handling the disbursing of funds related to the closing in a real estate closing transaction in which a title insurance commitment or policy is to be issued.”
Under the Contract, the only closing costs that should be charged to the seller are set out under Paragraph 9a. Owner’s Policy and Charges are only charged to seller if Paragraph 9(c)(i) is checked in which case seller designates the closing agent and pays for Owner’s Policy and Charges. However, the closing agent may charge the buyer for closing services related to buyer’s loan closing if buyer is obtaining financing. Otherwise, the buyer shouldn’t be charged a closing fee by seller’s closing agent.
Please keep in mind that closing services do not include the closing agent preparing documents to cure a title or survey defect. The closing agent may charge the seller for preparing documents to cure such defect. In addition, the seller has to pay for recording such corrective documents and any other fees related to curing the defect as provided under the Contract.
In conclusion, as you can see above, closing services encompasses much more than the closing agent just conducting the closing. Keep this in mind when you review the closing statement and the closing fee being charged by the closing agent and make sure the closing agent isn’t double dipping. As always, if you have any questions concerning the foregoing, we urge you to consult with your real estate attorney.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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