Closing Costs - What to Know Before You Make an Offer

Real Estate Agent with Susan Johnson Team

Consider Sales Price Plus Closing Costs

Don't get caught off guard at closing time!  If you are thinking of buying a house, make sure that you also take closing costs into account, besides the actual price of the property.

Wondering what closing costs are for Buyers in NC?

Closing costs are directly related to the transfer of a property from the seller to the buyer. It is very important to make sure that the whole process is performed properly. Any carelessness in this process might create problems in the smooth transfer of the property between the buyer and the seller.  In NC an Attorney is used to manage the closing process.  Generally both parties, buyer and seller, use the same closing attorney.

These closing costs are extra expenses that are necessary to bear while buying a property. They can increase the price of a house considerably.

When purchasing a house, you need to take certain actions to ensure that your closing costs are fair and reasonable.

Closing costs can include loan origination fees and third-party fees for services such as appraisals, surveys, home inspections, pest inspections and other tests.  Closing costs can also include your share of yearly property taxes unpaid, HOA dues, and other transaction fee. Some closing costs are negotiable too, so make sure you consult a professional who is looking out for your best interest.  Negotiate closing costs in your offer.  It's much harder to negotiate after the contact has been accepted.

Do Your Research

When you decide to purchase a house, do some research about the current real estate market trend. Utilize the services of an experienced real estate agent, so they can guide you regarding different legal documents and procedures which need to be carried out at the time of the purchase of a property. As a Buyer, it is in your best interest to use a Buyer's Agent.  The seller pays all broker fees and the buyer's agent has a fiduciary duty to look out for your best interest.

Payments of Closing Costs

The closing costs differ, depending upon the state and county in which you want to buy the property. As the procedure is different for various locations, the best way would be to discuss it with your lender, for getting a more precise estimation of your closing costs.

Some closing costs are paid by the buyer and some are paid by the seller.  Some are negotiable as to who will and can pay.  Also, lenders closing costs can be negotiable so shopping and comparing lenders ahead of time is a good idea.

Advance Payment

Depending on the type of loan you get, the mortgage lenders may demand the new property owners to pay for a year of the new home owner’s insurance in advance.  Some HOA fees, other insurance premiums and other recurring costs may also need to be paid upfront.

Get it in Writing

A good lender and real estate agent will provide you with an estimate of closing costs.  Although some costs may arise during the closing process, an estimate will provide you with a very good  understanding of how much money you will need out of pocket for closing.  Many real estate transactions are delayed or halted because either party failed to understand their obligations at closing. Whether you are the seller or the buyer, ask your Agent if they have consulted with the other party as well regarding closing costs.  A standard federal HUD-1 form will be given to both parties through the closing Attorney during the transaction, but that doesn't mean you can't assess costs before you even make an offer.

Other Things to Consider

Since buying a house is such a huge and major investment, you should ensure that your closing costs are reasonably concluded. Make sure that the property paperwork is completed properly and all the legal documents are in conformity with the state law.  A good real estate agent can guide you through this critical stage of buying a home.  Finding a property is the easy part - negotiating a mutually agreeable contract, navigating the legal aspects, ensuring compliance of all parties involved and managing the closing process are just some of the many responsibilities your agent will undertake.  Don't trust this important job to just anyone.  Do your research before you choose an agent to represent you!

Contact Susan Johnson & Associates for a free consultation to discuss your home buying or home selling goals in the Lake Norman and Charlotte, NC areas.

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