What are some closing costs involved in a real estate transaction? Buyers and Sellers both have closings costs to consider when selling or buying a home. Here are some of the most common charges that you might have to pay.
- Title Insurance: It is best to purchase two different types of title insurances including the owner’s policy and the lender’s policy. The main purpose of these policies is to protect both the owner as well as the buyer against any such claims. It is often called as clearing title where both owner as well as the buyer pays for their respective coverage.
- Attorney/Escrow charges: Many states have third-party escrow regulation where a third-part escrow company or attorneys close a real estate transaction. Every state has different rules and professionals including title agents, brokers, real estate agents, title companies, and even lenders can close these transactions as per the state norms.
- Recording fee: You have to pay recording fee to the county that records the ownership of a particular property.
- Transfer and documentary taxes: Closing a real estate transaction involves paying fees to the county, city, and state for the transfer or documentation of the overall transaction. It is often called as reconveyance cost in many states.
- Brokerage commission: It is a pre-defined fee that the seller and their real estate agent agree to pay for the sale of the house. In Alaska it is usually 6% of the contract price. The fee may vary among other states.
- Settlement fee: Settlement fee includes charges of the lawyer, Escrow Company, and any third party managing the financial end of the transaction.
- Septic Inspection: For houses with septic tank, you have to arrange septic tank inspection and bear the charges for the same.
- Other fees: Some contractor costs for repairs or inspection can be allowed to be paid at closing. These costs would need to be presented with an invoice to be paid at the date of fund disbursments.
In most cases, buyers end up paying a major part of the fees as part of their loan. However, as a seller, you should be ready for negotiations some or all of these costs, the buyer may ask you to include these costs in the purchase of your home.
It is best to consult with your REALTOR® when an offer is received. Your REALTOR® will able to help you negotiate a win-win deal for everyone.
Contact me for more questions about buying or selling real estate. I'd be happy to consult with you about the home buying or selling process.
Hire a positive and proactive REALTOR® to help you find your next home!
Search entire Alaska MLS for FREE at alaskanspiritrealty.com/propertysearch