How Florida Real Estate Closings Work
Unlike some states that require an attorney to conduct closings, Florida allows closings to be handled by either a licensed title company or an attorney. The closing agent (title company or attorney) handles the title search, title insurance, preparation of documents, and disbursement of funds. In Florida, it is customary for the buyer to select the title company in many parts of the state (though this varies by region and contract)—meaning the buyer controls who handles the closing.
Having your own real estate attorney review the contract and closing documents before signing is always advisable for significant transactions, even when not required. Florida real estate contracts contain important default provisions that buyers and sellers routinely misunderstand.
Florida Seller Disclosure Requirements
Florida follows the "Johnson v. Davis" rule, established by the Florida Supreme Court: sellers of residential property must disclose all known facts materially affecting the value of the property that are not readily observable and not known to the buyer. This includes: roof condition, plumbing issues, flooding history, sinkholes, HOA disputes, neighbor disputes, and any other material fact. Failure to disclose can make a seller liable for rescission of the contract or damages even after closing.
Florida Closing Costs
Florida buyers typically pay 2–4% of the purchase price in closing costs. Key items include: documentary stamp tax on the note ($0.35 per $100 of the mortgage amount, paid by the buyer); owner's title insurance; lender's title insurance; origination and underwriting fees; appraisal; and prepaid items (insurance, taxes, interest). The seller pays the documentary stamp tax on the deed ($0.70 per $100 of the purchase price) and is also responsible for the real estate commission (typically 5–6%) and their own closing costs.
Common Florida Closing Problems
Florida's high hurricane risk creates specific closing challenges: lender-required wind mitigation inspections, Citizens Insurance certification requirements, and disputes about adequate coverage. Sinkhole disclosures and sinkhole exclusions on insurance policies are frequent issues in central Florida. Title chain problems are common in Florida given its complex land grant history. Always allow 45–60 days for a smooth Florida purchase and expect that sinkhole, insurance, or inspection issues may extend the timeline.
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Frequently asked questions
What is a sinkhole disclosure in Florida and do I need to worry about it?
Sellers must disclose known sinkhole activity. Florida sits on limestone geology prone to sinkholes, particularly in the I-4 corridor. Insurance companies began excluding sinkhole coverage after 2011 reforms, requiring separate sinkhole coverage endorsements. Before closing, review the property's sinkhole disclosure, the seller's insurance history, and the availability of sinkhole coverage from your insurer.
What is Florida's documentary stamp tax and who pays it?
Florida's doc stamp tax on the deed (sale) is $0.70 per $100 of the purchase price, paid by the seller in most Florida counties (Miami-Dade has a different structure). The doc stamp on the mortgage note is $0.35 per $100 of the loan amount, paid by the buyer. On a $400,000 purchase with an $320,000 loan, the seller pays $2,800 in deed doc stamps and the buyer pays $1,120 in note doc stamps.
What happens at a Florida real estate closing?
Both parties (or their attorneys with power of attorney) sign all required documents, typically at the title company's office. The buyer brings closing funds (wire transfer is standard). The title company disburses funds: paying off the seller's mortgage, distributing the net proceeds to the seller, paying commissions, and paying all closing costs. The deed and mortgage are recorded electronically with the county clerk within 24–48 hours.