How Much Are Closing Costs?

Closing Costs are expenses contributed by both buyers and sellers at the last stage of the home-buying process. Buyers will get the keys to their dream house only after they pay the closing costs. 

What are Closing Costs? 

In a real estate transaction, both the parties i.e. buyer and seller have to pay some expenses while closing the deal. Such expenses are called Closing Costs. 

How much are Closing Costs ?

Closing costs expenses need to be paid when ownership of the property is transferred to the buyer from a seller. However, the fixed amount of closing costs is likely to differ as per actual price and location of the property.

Average closing costs: 

Buyers: They pay between 2% and 6% of the purchase price. 

Sellers: They pay between 8% and 10% of the sale price. 

Who Pays Closing Costs?

Sellers and buyers have to pay closing costs. But in the case of buyers, they have to pay more than sellers. 

How much are Closing Costs for Seller?

Sellers of course earn profits in a real estate transaction, but they will also have to contribute towards covering the closing costs. Below listed are some of the closing costs for seller:

Property Closing Costs:

1. Home Inspection fee
2. Home Warranty Fee
3. Utility Bills
4. Owner’s Title Insurance
5. Municipal Lien Search
6. Credits Towards Closing Costs

Mortgage Closing Costs:

1. Mortgage Payoff

Administrative Fees:

1. Attorney fees
2. Escrow fee
3. Settlement Fee/Escrow Fee
4. Real Estate Agent Commission

Government fees and real estate taxes:

1. Property taxes
2. Documentary Stamp/ Transfer Tax

HOA Fees:

1. Homeowner Association (HOA) Fee/ Document Fee
2. HOA Estoppel Fee

How much are Closing Costs for Buyer?

Buyer closing costs may vary depending on the locality of the property and the type of loan they are opting for. Below is the list of some fees that buyers have to pay when closing a property deal:

Property Closing Costs:

1. Home Inspection fee (Pest inspection + lead-based paint inspection)
2. Home Appraisal fee
3. Title Search fee
4. Title Insurance fee
5. Homeowners Insurance
6. Flood Certification
7. Survey fees
8. Application fee

Mortgage Closing Costs

1. Credit reporting fees
2. Discount points
3. FHA mortgage insurance
4. Loan Origination fee
5. Prepaid daily interest charges
6. Private mortgage insurance
7. Rate lock fee
8. Underwriting fee
9. VA Funding fee
10. Mortgage Impound account

Government fees and real estate taxes

1. Property tax
2. Recording fees
3. Transfer tax/ documentary stamp tax

Administrative Fees

1. Attorney fees
2. Settlement/Closing fees
3. Escrow fees
4. Loan-tie-in-fees
5. Courier fees

HOA Fees

1. Homeowners Association transfer fee
2. HOA estoppel fee

Settlement Costs

Conclusion

Buyers and sellers cannot escape closing costs when doing a real estate deal. But there are a few costs that they can surely negotiate. They can also roll these expenses into a mortgage.  

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