Real Estate Closing Costs - North Carolina
The group of fees associated with the buying or selling of a home in North Carolina are called Closing Costs. Certain fees are automatically assigned to either the buyer or the seller; other costs are negotiable or dictated by local custom.
Buyer closing costs:
When a buyer applies for a loan, lenders are required to provide them with with a good-faith estimate of their Closing Costs. The fees vary according to several factors, including the type of loan they applied for and the terms of the purchase agreement. Likewise, some of the closing costs, especially those associated with the loan application, are actually paid in advance. Some typical buyer Closing Costs include:
- Earnest money or down payment
- Loan fees (points, application fee, credit report)
- Orignation fees, Appraisal fee
- Inspection fees
- Whole house inspection
- Septic inspection
- Termite inspection
- Water test
- Radon test
- Title Insurance
- Attorney fees
- Documentary stamps on the deed
- Mortgage Insurance
- Homeowners Hazard Insurance
- Property Taxes (pro-rated)
Seller Closing Costs
If the seller has a remaining balance on a mortgage for the home that has sold, the closing attorney will will contact the seller's lender to obtain the payoff amount need to close the loan. This loan amount, along with other fees will be paid before the seller receives any proceeds from the sale. Other seller Closing Costs can include:
- Real Estate Broker's commission
- Revenue Stamps for the sale price of the home
- Documentary Stamps on the deed
- Attorney fees to prepare the deed
- Property Taxes (pro-rated)
- Pay off of existing mortgage
Negotiating Closing Costs
In many instances the buyer may ask the seller to pay for certain items that would normally be paid for by the buyer. This woud be negotiated on the Offer to Purchase, at the time an offer is first presented to the seller. The buyer can ask the ask for any major or minor fees. For instance, if a buyer is particularly nervous about the condition of the plumbing, the seller may agree to pay for the whole house inspection.
In some instances, a buyer may want to make a full price offer or even above a full price offer, when they want to save on up-front costs, and then ask the seller to pay for all allowable closing costs. There really is no right or wrong way to negotiate Closing Costs, the circumstances are different in each transaction. The most important thing is that all terms are written in the offer to purchase agreement.
At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common prorations are for property taxes. This is because property taxes are typically paid at the end of the year for which they are assessed. Typically the total tax bill is divided by 365 days for the year, and then the buyer and seller pay for the amount of days they will own the house during the year. The tax bill in our local area comes out in September and is due at the end of the year. So there are many scenarios that can happen and that is why they are pro-rated, to make it equitable for everyone in the transaction.