Understanding Closing Costs in Monroe County: Who Pays What?

If you’re buying or selling property in the Florida Keys, you’ve probably heard the term “closing costs” tossed around. But what exactly are these costs, and more importantly, who pays for what in Monroe County?

Closing costs are the fees and expenses that come due at the end of a real estate transaction, on top of the purchase price of the property. They include things like title insurance, transfer taxes, lender fees, and recording charges. And while they can feel overwhelming, knowing what to expect (and who typically pays) can make the process much smoother.

What Are Closing Costs?

Closing costs generally run 2% to 5% of the home’s purchase price, depending on the type of property, financing, and negotiation terms. In Monroe County (which includes Key West, Marathon, Islamorada, and the Lower Keys), closing costs follow some standard local practices, though everything is ultimately negotiable.

Buyer’s Closing Costs in Monroe County

In most Monroe County transactions, buyers are responsible for:

1. Title Insurance (Buyer’s Policy)*

Protects the buyer (and their lender) against defects in the title.

2. Buyer Broker Commission

While this is a buyer cost, it's your real estate agent's job to negotiate with the seller to have them either pay the commission or contribute towards it.

3. Loan-Related Fees

Origination fees, appraisal, credit report, underwriting, and other lender charges.

4. Recording Fees

Charged by Monroe County to record the deed and mortgage documents.

5. Survey

If required by the lender or title company, a property survey ensures boundaries are clear.

6. Inspection Fees

General home inspection, wind mitigation, and four-point inspection (common in Florida due to insurance requirements).

Seller’s Closing Costs in Monroe County

Sellers typically cover a different set of costs, including:

1. Title Insurance (Owner’s Policy)*

In Monroe County, it’s customary for the seller to pay for the owner’s title insurance policy.

This protects the buyer’s ownership rights after the sale.

2. Documentary Stamp Tax (Doc Stamps)

A state tax on the transfer of property.

Calculated as $0.70 per $100 of the purchase price (or fraction thereof).

For example, on a $1,000,000 property, the doc stamps would total $7,000—a significant seller expense.

3. Real Estate Commission

Usually the seller pays both the listing agent and buyer’s agent commissions, unless negotiated otherwise.

4. HOA/Condo Dues (Prorated)

Any unpaid homeowners’ association or condo fees are settled at closing.

5. Municipal Liens or Code Compliance

If there are open permits or code violations, sellers typically must resolve these prior to closing.

Shared or Negotiable Costs

Some costs can be split between buyer and seller, or negotiated as part of the deal. These often include:

• Title Insurance

• Escrow Fees: The cost of the closing agent’s services.

• Home Warranty: Sometimes offered by the seller as an incentive.

• Repairs or Credits: If inspections reveal issues, buyers may request repairs or a credit toward closing costs.

Example Breakdown on a $1,000,000 Sale

Here’s a simplified snapshot of what closing costs might look like in Monroe County:

• Buyer Pays:

  • Loan origination & lender fees: $7,000–$12,000

  • Title insurance (lender’s policy): $2,500–$3,500

  • Inspections & survey: $1,000–$1,500

  • Recording fees: $300–$500

• Seller Pays:

  • Doc stamps: $7,000

  • Title insurance (owner’s policy): $2,500–$3,500

  • Realtor commissions: typically 5–6% of sale price ($50,000–$60,000)

  • HOA/condo prorations or payoff of any liens

Tips for Buyers and Sellers

For Buyers:

• Budget beyond your down payment—closing costs can add up quickly.

• Ask your lender for a Loan Estimate early in the process.

• Consider negotiating seller credits to offset some expenses.

For Sellers:

• Know your doc stamp and commission obligations before you list - ask your listing agent for a Net Seller Sheet so you can have an idea of what your bottom line is when you are negotiating.

• Be proactive about resolving open permits or HOA issues.

• Offering to cover part of the buyer’s costs can sweeten the deal in a competitive market.

In Monroe County, closing costs can feel like a maze, but they don’t have to be stressful. The key is knowing what’s customary in the Keys, planning, and working with a knowledgeable local realtor and title company.

It doesn't matter if you're buying your first slice of paradise in Key West or selling a long-loved home in Islamorada, understanding who pays what at the closing table will help you to be prepared for negotiations and ensure that you have all the information you need to make an educated decision as a buyer or a seller.