✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
After saving a fair amount for down payment, finalizing property and obtaining a loan, closing costs might come as a surprise. The last pit stop before you own the property is closing costs. Closing cost expenses are shared by both the buyer and the seller. A buyer of the property has to always pay a bit more than a seller for closing costs.
What are Closing Costs?
The expenses that purchasers and sellers must pay to complete a real estate deal are called closing costs.
Who Pays Closing Costs
Closing cost expenses are paid by both the buyer and the seller. Buyer closing costs usually range between 2% and 6% of the total sale price of property. Whereas, seller closing costs could range between 8% and 10% of the sales price.
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What are Closing Costs for Buyer?
Buyer closing costs are inevitable part of home buying process. The amount of closing expenses a property buyer must pay might differ significantly depending on the property’s value, locality, and other elements.
Most closing costs are typically borne by the buyer. Check out the list of closing costs for the buyer below:
Property Closing Costs:
- Home Inspection fee (Pest inspection + lead-based paint inspection)
- Home Appraisal fee
- Title Search fee
- Title Insurance fee
- Homeowners Insurance
- Flood Certification
- Survey fees
- Application fee
Mortgage Closing Costs
- Credit reporting fees
- Discount points
- FHA mortgage insurance
- Loan Origination fee
- Prepaid daily interest charges
- Private mortgage insurance
- Rate lock fee
- Underwriting fee
- VA Funding fee
- Mortgage Impound account
Government fees and real estate taxes
- Property tax
- Recording fees
- Transfer tax/ documentary stamp tax
Administrative Fees
- Attorney fees
- Settlement/Closing fees
- Escrow fees
- Loan-tie-in-fees
- Courier fees
HOA Fees
- Homeowners Association transfer fee
- HOA estoppel fee
Closing Costs for Buyer
Conclusion
Home buyers will usually have more expenses to pay for closing costs than sellers. It’s crucial for you to understand buyer closing costs because it can show you where you can save expenditures and estimate your financial capacity.
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