This is the question most sellers and buyers ask when the deal is almost finished and the only step that is left is title transaction. So let's find out what closing costs are and who pays for what at closing.
To begin with, closing costs usually include title insurance, escrow charges, attorney fees, loan fees; they may also include the buyer's agent commission and so on.
But who is responsible for what? In most cases this is a matter of negotiation btw buyer and seller and their agreement. The seller shouldn't expect that the buyer would agree to pay for everything. It is quite possible only if the seller lowers the price. But if the seller is not ready for this it is better to split the expenses.
An escrow, for example, is necessary for both buyer and seller. You just can't close the deal without it. The buyer should pay for title insurance because this protects him and the lender. What concerns attorney fees, if this is seller's attorney and he advises him, he is going to pay and vice versa. But if the attorney draws up the sales agreement and other documents, then it benefits both parties and the fee should be split. It is clear that the buyer should pay for loan fees while title clearing costs is the seller's responsibility.
To sum up, there are no any strict rules that determine who pays what at closing. All these fees can be negotiated. It depends mainly on the market. If it's a seller's market and there are lots of buyers out there, the seller may demand, and get, the buyer to pay all the closing costs. On the other hand, if it's a buyer's market, the seller may want to pay those costs himself in order to hook a buyer into purchasing his home.
Comments(0)