Part Eight: Closing and Moving:
Once the closing date is set, the excitement really grows because you are only a step away from selling your home. Be careful not to go to the table without knowing what to expect. It is important to know the procedure including buyer and seller closing costs, so that you can stay on top of everything- especially your buyer's portion of the transaction since they may be asking you to share in some of their expenses. The total closing costs will vary depending on the type of loan the buyer has, the location of your home and the complexity of the transaction.
Now we'll go through the components involved in the closing process. The first component of the costs is marketing fees- commonly referred to as commission. The next component of closing costs are origination fees which include a loan origination fee, an appraisal fee and the cost of ordering your buyer's credit report. Other related costs may include hazard insurance, mortgage insurance and any interest accrued on the mortgage from the closing date to the end of the month. Then there are the optional discount points for the loan. This is a one-time fee that is paid at closing and varies depending on the loan amount. Some buyers choose to pay this amount up front to reduce the ongoing cost of the mortgage while others choose to have the seller pay for this as a stipulation in their offer. The taxes and any miscellaneous items (which vary according to the requirement of your local government) can include personal property taxes, homeowner's association dues, and other local assessments.
Next is the documentation or "Doc Fees". This covers the cost of researching public records to trace the title and ensure that the property can be legally turned over to your buyer at closing. Other doc fees include recording and transfer fees that cover the legal transfer of the deed from your name to the buyer's name. Some of these fees are variable depending on the structure of the offer that you receive.
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