How do closing costs work? Can any be incorporated into the mortgage loan? Or all of them paid in cash at closing? And how do the agents get paid?

Asked by Angela, Orlando, FL Mon Jan 9, 2012

The short sale contract requires that I as buyer pay all closing costs and put up $1000 earnest money deposit with the filing of the contract plus the $2400 processing fee.

Help the community by answering this question:

+ web reference
Web reference:


Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Sun Aug 26, 2012

It sure seems like something is not right with this scenario as I believe it could have been structured a lot better!

May I ask you a few questions off this site? There may be time to make make changes and save a lot of money!

Email me at:

0 votes
Michael Bell…, Agent, Altamonte Springs, FL
Mon Apr 30, 2012

Closing cost include items such as title insurance, document stamps, prorated property taxes, commissions, prorated HOA fees, etc. On some loan types those fees can be included in the loan. For first time home buyers, displaced home buyers, or buyers who have not owned a home in the past three year there are down payment assistance programs to aide in covering closing cost.

With regards to how agents are paid. In most cases the Realtors commission is paid from the Sellers proceeds from the sale.

Michael D. Bellamy, P.A.,
Charles Rutenberg Realty, Inc
933 Lee Rd, Suite 300
Orlando, FL 32810

407.536.MIKE(6453) (direct)
407.622.2122 (office)
866.659.1822 (fax)
"The Standard of Excellence"
0 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sat Feb 25, 2012
Check out my blog on this topic here on Trulia:…
0 votes
Vincent Paige…, Agent, Orlando, FL
Fri Feb 24, 2012

Grab your agent and closing agent from the title company and get a copy of your HUD1 and review it BEFORE closing to insure no surprises! Typically 3-5% of the cost of the home is a good guide for closing costs.

Highest and best regards,

Vincent Paige
REALTOR® | Century 21 Elite Home Finders
Certified BPO Specialist
5401 S. Kirkman Rd., Ste 725 | Orlando, FL
Direct: 407.256.8190 | Fax: 407.264.8073

Visit and find your dream home today!
0 votes
Camille Ruiz, Agent, Clermont, FL
Thu Feb 23, 2012
I forgot to answer about our comissions as REALTORS. Realtor fees are paid by the seller of the property. In a short sale situation; it is the short sale lender that is responsible for that; not the buyer. The same holds true in foreclosures, traditional, and new home sales. It does not cost the buyer anything, so why not be represented or protected.


Camille Ruiz
0 votes
Camille Ruiz, Agent, Clermont, FL
Thu Feb 23, 2012
Hi Angela,

I apologize for arriving late to the party.

I hope it has been sorted out. I would first say that as the agent helping you with the purchase, I would negotiate with the seller about the $2400 processing fee. Basically that is the charge that the attorney is charging the seller to process the short sale and in turn the seller is passing the cost on to you. On my short sale contracts in which the sellers are asking for that; I put that the lender or seller will be responsible for the amount, not the buyers. Also the short sale lender (bank that holds the mortgage on the property) usually, if asked by your agent in the contract pay for their part of the title costs, lender policies etc. The buyer does have some obligations as well. You will need to pay for the owners title policy as well as other costs associated with your mortgage (generally about 5% in addition to your down payment amount based on the type of loan selected). You can always ask the lender to help pay some of those costs. You never now. Many short sale closings I have done, seller has paid 3% towards buyers closing costs and prepaids. If you are doing an FHA mortgage that requires 3 1/2% down payment, that money has to come from you or from gift funds. If with the credits from the seller the amount left is less, then those credits will be adjusted. Your $1,000 dollars will be subracted at closing from the amount owed.

Please go to and click on buyer's closing cost estimator. It is a vary good and accurate link.

If you have any questions, or if I can help you with the purchase please let me know.

Camille Ruiz
Realtor, Watson Realty Corp
0 votes
Charles M Wi…, , Winter Park, FL
Mon Jan 9, 2012
Typically closing costs are split between buyer and seller. This split differs with different markets. It should have been disclosed to you on a HUD1 when you signed the contract. Talk to your lender about whether these costs can be included in the mortgage. The processing fee may be a fee to a negotiator hired by the listing agent to help with the short sale. This should have been disclosed to you on the listing even before you signed the contract, but will be on the HUD1. This is a little unusual since most listing agents try to put it on the HUD1 as a fee paid by the bank. If the bank won't accept the fee, it is typically a reduction in the total commission which is apportioned between the seller and the buyer. The earnest money deposit at time of signing the contract is reasonable, though not all realtors do this. And depending on the contract amount, $1,000 also sound reasonable. Good Luck. Charles Williams, Realtor, Winter Park Land Co, 321-277-6733
0 votes
Radinka Ilsi…, Agent, Lakewood Ranch, FL
Mon Jan 9, 2012
Hi Angela,
I have several blogs and tips on my website that can spell it out for you. Here is a direct link to a breakdown of closing costs in Florida:…

And here is another one showing who pays what:

You can also search my site using the words "title" and "Closing Costs" to get even more examples.

To answer your questions:
How do closing costs work? - see the link above

Can any be incorporated into the mortgage loan?- yes, some of them can be, talk to your mortgage lender to see which costs can be incorporated into the loan that you've been qualified for. Allowable closing costs vary depending on the lender and type of loan.

Or all of them paid in cash at closing?- some fees, like courier fees, loss mitigator fees etc cannot be included and need to be paid cash at closing but must be disclosed on the HUD.

And how do the agents get paid? - typically the seller will pay the agent's Broker the commission. In a short sale, the sellers' bank who is agreeing to do a short sale will pay the commission, sometimes they reduce the commission the agent gets paid to compensate for the loss they are taking.
0 votes
Ron Thomas, Agent, Fresno, CA
Mon Jan 9, 2012
You could get 10 answers to this question, and still not understand:
(Actually, you should be asking your Agent.)
Go to your Title Company and ask your Escrow Officer for a copy of the HUD1,
then ask them to go over it for you.

Good luck and may God bless
0 votes
Carol Bauza, Agent, Orlando, FL
Mon Jan 9, 2012
EMD is usually required for all transactions. Now whether or not it is paid at submission or after third party differs from transaction to transaction. Paying for all of your closing costs could be because they have already had the bank require no contingencies and any % towards closing would not be paid by the "bank". Closing costs cannot be incorporated into a mortgage. Paying them in "cash" at closing is the norm. The agents and their brokers are paid by the sellers from proceeds of the sale. And paying that $2400 for a processing fee???? Yikes....that's high.
If you have any other've come to the right place. Trulia is a great place to get an assortment of answers from some great agents!
If you would like my help...please feel free to email me!

Good Luck

Carol Bauza
Charles Rutenberg Realty
0 votes
Mott Marvin…, Agent, Sunny Isles Beach, FL
Mon Jan 9, 2012

There are 3 types of costs to close. Buyers • Sellers and Mortgage Closing Costs.

Agents-Brokers get paid from the proceeds of the transaction.

For specifc details search for buyers-seller closing costs in Florida
0 votes
Search Advice
Ask our community a question
Home Buying in Winter Park Zip Codes

Email me when…

Learn more