Closing costs can vary widely, depending on numerous factors. Lenders are obligated to give home buyers a Good Faith Estimate of closing costs within three days of completion of a home application. Typically, the buyer’s biggest expenses will relate to costs associated with their loan (origination fee/points), while the seller’s biggest expense will be the broker’s commission.
Buyers will typically be responsible for the following:
- Attorney Fee for Closing
- Attorney Fee for Title Search
- Owners Title Insurance
- Lenders Title Insurance
- Recording of the Deed
- Pro-rations of Taxes and HOA Fees (if applicable)
- Loan Origination Fee (if Purchase is Financed)
- Points To Buy Down the Interest Rate on Loan (if Purchase is Financed)
- Appraisal Fee (Typically Paid Before Closing; Not Required if A Cash Transaction)
- Flood Certification
- Credit Report (Typically Paid Before Closing)
- Interest Paid on the Loan From the Day of Closing Until the First Payment is Due (Can Be Minimized if Closing is Late in the Month)
- Escrow Reserves for Taxes and Insurance (If the Buyer Chooses to have Their Lender Pay the Annual Real Estate Taxes and Insurance Payment)
- Recording of the Mortgage (Deed of Trust) with the County
- Homeowners Insurance Policy (Paid 1 Year in Advance)
- Home/Radon/Pest/Septic Inspections (Optional But Highly Recommended)
- Home Warranty (Optional/Sometimes Paid By Seller)
- Survey (Optional)
Sellers will typically be responsible for the following:
- Attorney Fee for Deed Preparation
- Attorney Fees, Including Faxes, Copies and Courier
- Recording Fees to Satisfy Deed of Trust
- State Revenue Tax Stamps
- Pro-ration of Taxes and HOA
- Payoff of any Mortgages or Additional Liens Associated with the Property
- Any Negotiated Seller Paid Closing Costs
- Real Estate Agent Commissions
It is not uncommon for buyers to negotiate a slightly higher offer in exchange for closing cost concessions….in order to minimize out of pocket expenses. Obviously, the willingness of sellers to contribute will depend upon the particular property and market. Please read the link below to learn more about this potential option: