What Are and Who Pays the Cost of Closing
You've saved up your down payment and found the perfect home. You think you've got everything handled brilliantly. Then comes the monkey wrench to the works. You start to learn of more and more expenses you didn't know were involved. To make it more confusing, not all these expenses are yours, some are the sellers. Before you find yourself short on cash, it's good to learn all the costs of a home sale and who has to pay each item.
The types of closing on a home purchase are normally similar around the country, but the actual costs will vary from area to area. If you're borrowing money and have a mortgage, the costs will vary from lender to lender, so shopping around for the best rate and the lowest closing costs. Many of the costs are negotiated between the buyer and seller before the closing.
A good real estate agent can be worth their weight in gold. Luckily, a seller doesn't have to pay that much. The amount the seller pays depends on the contract with the agent and how much commission they charge. The commission is a percentage of the price of the home.
Real Estate Taxes
The allocation of property tax is based on the amount of time the seller lived at the property and the time the buyer will live there. The area where you live determines whether the taxes are paid in advance or arrears and that will make the difference who pays.
Title Insurance for the Buyer—Sometimes.
This guarantees the purchaser is getting a clean title. The payer of this varies from state to state. Sometimes there are two policies with the buyer paying one for the bank and seller buying one for the buyer. Some states require a property survey.
These are based on the county or local government and are the cost of transferring the title of the property.
Home warranty premiums---If negotiated
Buyers Costs at Closing
While this is required if you have a lender, it's also a good idea if you happen to be lucky enough to pay cash, but it's not mandatory. It can run as high as $500.
Not all states require an attorney at closing.
Credit Report Fee
This is a cost if you're getting a mortgage. It can be as high as $30
Survey and/or Title Insurance
See above in sellers cost section.
The price varies on this. It is a search to insure the seller has the right to sell and there's no property liens.
The buyer may have to pay a portion. See the sellers section.
This can be as much as .2% of the purchase price plus $250
Courier Fee for Transporting Documents
These run $30+.
Home Inspection and Termite Inspection
The home inspection can run as much as $450 while the termite or infestation inspection cost approximate $125-$200
This varies by location and is the cost of recording the transaction.
The price varies by the area, type of home, cost of home and coverage.
Escrow Deposits for Insurance and Property Taxes
This is only if your lending institution is paying both mortgage and taxes from an escrow account in the future.
Processing fees, underwriting fees, discount points and underwriting fees are all part of the cost of securing a mortgage. Your lender should let you know the costs of this before you choose to borrow from them. Shop around and find the best terms you can.
Solid Source Realty