Closing Costs in Santa Cruz
Closing Costs are the fees and expenses that buyers and sellers can expect to pay for when buying or selling homes. There are many costs involved in a real estate transaction aside from the actual price of the property. You will want to know these fees, especially if you are planning on buying or selling real estate in the future. The average closing cost in the city of Santa Cruz is between 2% and 5% of the price of the house.
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Buyer's Closing Costs
| Loan Origination Fee | Generally around 1% of the loan amount. |
| Points | Each point is equal to 1% of the loan amount. Points buy down the interest rate typically by 0.25% per point. |
| Application Fee | Paid to the lender or the broker to check credit and process the initial loan application. |
| Escrow Fee | Paid to the escrow company t closing. |
| Appraisal Fee | Paid to the appraiser who determines the value of the property. |
| Title Search and Examination Fee | Paid to the lender to research the property’s title and find out if there are liens and who the rightful owner of the property is. |
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Seller's Closing Costs
| Broker’s Commission | The commissions paid to the realtor(s) or real estate broker are usually 6% of the sales price (3% paid to the buyer’s broker and 3% paid to the seller’s broker). |
| Escrow Fee | Paid to the escrow company at closing. |
| Attorney Fee (if applicable) | This is paid to the attorney who represents the seller at the time of closing. |
| Other Closing Costs | The seller often pays title insurance and document preparation fees at closing. Sellers may have to pay more of the closing costs if that is part of the purchase agreement. |
| Other Negotiated Fees | Additional seller concessions such as home warranty fees or points paid towards the buyer’s mortgage interest rate may also be a part of the purchase agreement. |
Tips on Lowering your Closing Costs
1. Check out different Lenders and their rates.
There are many differences when it comes to rates between different lenders in a given region. If you plan to purchase a home and are looking at working with a lending company, you will want to make sure that you get the best deal possible. A half percent in savings on a $300,000 home will probably be $1,000 savings which will add up to a lot in the long run. There's a good chance you'll save about $1,500 for each quote and about $3,000 for five.
2. Good Faith Insurance (GFE) Form
A good point to follow, especially for first-time buyers is to ask for a Good Faith Insurance Form. The form is a list of every single fee involved in your transaction that will help you compare each lender. Make sure to let lenders know that you're requesting this form from all the lenders you are checking out.
3. Review Every Cost with the Lenders
Understanding what you're paying for is an important thing to know with all your transactions. There are several expenses that they hide with confusing terminologies - you will want to have your lender explain every one of your costs. You will want to ask for a detailed breakdown of all the charges involved in your deal so that you can identify which ones you can bargain.
4. Let the Lenders know that you are Evaluating your Options
The lending business can be quite competitive, and if the lenders know you're smart about your finances they will more often than not offer you better rates. Many lending companies would be willing to consider lowering their commission to close a sale. If you make it clear that you'll be choosing the best deal available they will most likely offer you the best deal they can give.
Check out our original blog post at https://ambermelenudo.com/.
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Let Me Help You Find Your Santa Cruz, California Home!
If you are a buyer, it is important to have the assistance of a Buyer's Agent to represent you during the transaction. If you need additional assistance or would like to schedule a showing, contact our office at (831) 661-5591.
1041 41st Ave, Santa Cruz, CA 95062
Phone: (831) 661-5591
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