What Are Closing Costs on a Luxury Home?

Closing costs on a luxury home purchase typically range from 2% to 5% of the purchase price, though the specific costs vary by state, transaction structure, and whether the purchase is financed or all-cash.

Typical closing cost components

Title insurance — protects the buyer's title from prior claims, liens, and encumbrances. In Florida, title insurance premiums are set by state regulation at approximately $5.75 per $1,000 of coverage. On a $10 million purchase, title insurance costs approximately $57,500.

Documentary stamp taxes — Florida levies a documentary stamp tax of $0.70 per $100 of consideration on all real property transfers. On a $10 million purchase, the documentary stamp tax is $70,000.

Intangible tax on mortgages — Florida charges $0.002 per dollar of mortgage debt on new mortgages. On a $7 million mortgage, the intangible tax is $14,000.

Attorney fees — in complex luxury transactions, legal review of the purchase agreement, HOA documents, title commitment, and closing documents is advisable. Attorney fees for luxury transaction review typically range from $2,500 to $10,000 depending on the complexity.

Survey — a current survey of the property is typically required by the title company. Surveys for luxury properties typically cost $2,500 to $10,000 depending on the property size and complexity.

Pre-paids and escrow — property taxes, homeowner's insurance premiums, and HOA fees may be prorated at closing, with the buyer responsible for the seller's prorated share plus initial escrow deposits.