Closing Costs
If you are in the market for buying or selling a home, I’m sure you have heard of the term “closing costs” by now. So, what are closing costs anyways?
Closing costs are costs such as fees and taxes that are required to be paid to finalize a real estate transaction. Closing costs can be negotiated, however both buyer and seller should be prepared to cover a portion of these costs.
Though closing costs can be negotiated, here are some common closing costs for buyers and sellers respectively:
Buyers:
Loan-related fees - loan origination fee, mortgage points, PMI, etc.
Appraisal
Title-related fees - Title insurance, title search, etc.
Escrow Fees
Property taxes, insurance premiums, and HOA dues (if applicable)
Inspections (typically paid outside of escrow)
City Transfer Tax (depending on city)
Buyer’s Agent Commissions (depending on offer)
Sellers:
Realtor Commissions (Seller’s Agent & potentially “Concessions” to cover Buyer Brokerage Fees)
County Transfer Tax
City Transfer Tax (depending on city)
Title Insurance
Property Taxes and HOA Fees (if applicable)
Mortgage Payoff (if applicable)
Keep in mind, like everything in a real estate transaction, everything is negotiable though there may be “norms” in various locations. The best way to understand and plan for these costs is to partner with a local Realtor that can refer well-respected Escrow Officers. You have a handful of partners in a real estate transaction and you want a strong team representing you and your deal. This includes an Agent, Escrow team, Lending team, and team of vendors (stagers, inspectors, contractors, etc).
