Closing Cost Confusion: The 2025 Update to FAR/BAR Paragraph 9
The question of who pays closing costs in Florida has become clearer thanks to a recent 2025 update to the standard FAR/BAR residential purchase agreement. Paragraph 9, which governs how closing expenses get divided between buyers and sellers, now includes explicit language about “Closing Services” fees. This change addresses a source of frequent disputes at Florida closing tables.
Before this update, buyers and sellers often disagreed about which party owed settlement and closing fees. Real estate agents and title companies sometimes relied on “customary practice” to assign costs, but customs vary by county and even by closing agent.
The 2025 revision reduces disputes specifically related to settlement and closing services fees by defining terms and clarifying default responsibility in the contract itself.
Key Takeaways for Who Pays Closing Costs in Florida
- The 2025 FAR/BAR contract update defines “Closing Services” and clarifies that, by default, each party pays their own closing services fees unless the contract provides otherwise.
- This clarification applies to both the Standard and As-Is versions of the FAR/BAR residential contract, so buyers and sellers using either form see the same default fee allocation language.
- The update did not shift costs from one party to another. It clarified default responsibilities to prevent last-minute arguments at closing, while preserving the ability to negotiate different terms.
What Paragraph 9 Governs in FAR/BAR Contracts
The FAR/BAR contract is the standard residential purchase agreement used throughout Florida. It results from collaboration between the Florida Association of Realtors and The Florida Bar. Paragraph 9 of this contract addresses how closing costs get allocated between buyer and seller.
The Role of Paragraph 9 in Florida Real Estate Transactions
Paragraph 9 lists specific costs and establishes default responsibility for either the buyer or the seller. These include title insurance premiums, documentary stamp taxes, recording fees, and various other charges that arise during a real estate closing.
The paragraph serves as the roadmap for who owes what at the closing table unless the parties negotiate different terms.
When parties sign a FAR/BAR contract, they agree to the default cost allocation in Paragraph 9 unless they modify those provisions. The problem before 2025 was that certain fees, particularly settlement and closing charges, lacked clear definitions. This created room for interpretation and disagreement.
Why “Closing Services” Needed a Definition
Settlement agents, title companies, and attorneys all charge fees for their work in completing a real estate transaction. These charges went by different names: settlement fees, closing fees, escrow fees, or closing services fees. The old contract language did not explicitly define these terms or clearly establish default responsibility for them.
This vagueness led to closing table disputes. A seller might receive a settlement statement showing a $400 closing fee and wonder why that charge appeared on their side. The buyer might ask the same question about a similar fee on their statement.
Without clear contract language, the answer often came down to local custom or negotiation under pressure.
How the 2025 Update Defines Closing Services
The revised Paragraph 9 now includes specific language that defines “Closing Services” and clarifies default responsibility. By default, each party pays their own closing services fees unless the contract provides otherwise. This clarification prevents many of the disputes that previously arose.
What Counts as a Closing Services Fee
Closing services fees generally refer to administrative charges related to conducting the closing. The fee compensates the closing agent for tasks like preparing closing documents, coordinating with lenders, managing escrow funds, and facilitating the actual closing meeting.
These fees may include items such as:
- Settlement or closing fees charged by the title company or closing agent
- Document preparation fees for closing paperwork
- Wire transfer fees for disbursing funds
- Notary fees for document execution at closing
- Courier or delivery charges related to closing documents
By default, each party now pays the closing services fees that relate to their side of the transaction unless they negotiate a different arrangement.
The Practical Effect at the Closing Table
Before this update, a title company might assign all closing fees to the seller based on county custom. Or the buyer might see unexpected charges because the contract lacked clear guidance. The closing agent had to make judgment calls that sometimes upset one or both parties.
Now, the contract itself provides a default answer. When a buyer or seller questions a closing services charge, the closing agent points to Paragraph 9. The language reduces the need for “customary practice” arguments and gives everyone a clear reference point for the default allocation.
Standard Versus As-Is Contract Treatment
Florida buyers and sellers commonly use two versions of the FAR/BAR contract: the Standard contract and the As-Is contract. The As-Is version differs primarily in how it handles property condition and inspection rights. Both versions include Paragraph 9, and both now contain the updated closing services language.
Consistency Across Contract Forms
Whether a buyer purchases a move-in ready home on the Standard contract or a fixer-upper on the As-Is contract, the default closing cost allocation follows the same rules. The 2025 update applies uniformly to both forms. This consistency helps real estate agents, title companies, and attorneys apply the same principles regardless of which contract the parties signed.
Buyers and sellers in Plantation, Florida, and throughout Broward County benefit from this uniform approach. Local closing practices may still vary somewhat, but the contract language now provides a consistent baseline for the default allocation.
Common Misunderstandings About the 2025 Change
Some buyers and sellers hear about the Paragraph 9 update and assume it shifted costs in a new direction. That misunderstanding may lead to unnecessary concern or even disputes based on incorrect expectations.
What the Update Did Not Change
The 2025 revision did not move costs from sellers to buyers or vice versa. It clarified default responsibility that already existed in practice but lacked explicit contract language. By default, buyers still pay buyer-side costs. By default, sellers still pay seller-side costs. The update simply defines those categories more precisely.
Parties who want a different arrangement may still negotiate. The FAR/BAR contract allows modifications through addenda or by striking and replacing specific provisions. The updated Paragraph 9 establishes the default, not an unchangeable mandate. Buyers and sellers remain free to agree on alternative fee allocations that suit their particular transaction.
FAQs for Florida Closing Costs and Paragraph 9
Before the Closing Table Becomes a Battleground
Disputes about closing costs often arise at the worst possible moment. The buyer has scheduled movers. The seller has a new home waiting. Neither party wants to walk away, but neither wants to pay unexpected fees. A few hundred dollars in contested charges may threaten an entire transaction.
Attorney Carlos M. Amor brings more than fifteen years of real estate law experience to contract reviews for buyers and sellers throughout Plantation, Florida and Broward County. A review before closing day may identify potential disputes while there is still time to address them calmly. The Law Office of Carlos M. Amor, P.A. offers free consultations by phone, video meeting, or in person. Contact the office to discuss your contract and closing questions.
