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Closing Costs in Western North Carolina

By inboundREM Market Updates

Services for Real Estate Pros with InboundREM

June 06, 2023 07:37 AM

The Ultimate Guide to Closing Costs in Western North Carolina

If you have decided to push through buying a new residential property, it is vital to have a clear understanding of all associated fees before you can finally have your keys. Closing costs in Western North Carolina can be confusing, so before you sign any paperwork for your loan, we'll review everything you need to understand to prepare for closing.

We will also offer suggestions on minimizing closing costs and maximizing your savings when buying a home.

What are Closing Costs?

Closing costs are an unavoidable expense that is associated with the purchasing or selling of real estate. Typically, the responsibility of bearing additional fees and expenses levied by the lender and other third-party entities falls on the homebuyer. However, it is also possible to negotiate with the seller to shoulder a portion of these costs as part of the home sale agreement. The allocation of costs in the transaction is contingent upon the contractual terms and mutual agreement reached by both parties.

Factors that Affect Closing Costs in Western North Carolina

A critical aspect of real estate transactions is understanding the closing costs involved. These costs are fees associated with finalizing a property sale. By familiarizing yourself with these costs and seeking professional guidance, you can avoid surprises and ensure a successful real estate deal. Let's look at some of the typical closing costs in Western North Carolina that can significantly affect your financial situation.

Common Closing Costs for Buyers

Appraisal Fee
Application Fee
Credit Report Fee
Home Inspection Fee
Loan Origination Fee
Loan Discount Points
Prorated Property Taxes
Title Search Fee
Title Insurance Fee
Underwriting Fee

Common Closing Costs for Sellers

Escrow Fees
Homeowners Association Fees
Prorated Property Taxes
Realtor Commission Fees
Seller's Attorney Fee
Transfer Taxes and Recording Fees

Tips for Managing and Reducing Closing Costs in Western North Carolina

Tips for Buyers

Negotiate with the Seller
The allocation of closing costs can vary depending on the contract terms negotiated in the purchase agreement. It is common for the home buyer to cover certain closing costs, while the seller is responsible for others, including the commission for the real estate agent. One option available is to request the seller to shoulder some of your portion. This contribution would be documented as "seller credits" on the loan estimate form. However, this particular strategy may be less effective in a seller's market, where the seller typically has greater negotiating power.

Consider a No-Closing-Cost Option
If you have to deal with a shortage of liquid funds to cover the closing costs, consider a no-closing-cost alternative. Your lender typically offers it in return for a relatively higher interest rate. By opting for this option, you can avoid needing upfront payment at closing. Remember that this may result in higher costs in the long term, as your lender will absorb these expenses while you pay a higher interest rate.

Take Advantage of Grants and Other Housing Programs
Various municipalities, counties, and states offer housing assistance programs for down payments and closing costs to eligible homebuyers, particularly first-time homebuyers.

End-of-Month Closing Process
By closing at the month's end, you can effectively minimize your cash outlay at closing. It can be achieved by reducing the days to which the per diem interest is applied before your first mortgage payment is due, typically on the first day of each month.

Inquire About Discounts and Rebates
In mortgage loans, certain lenders may provide incentives to entice potential borrowers.
Take advantage of these rebates to reduce costs by a few hundred dollars.

Tips for Sellers

Negotiate with the Buyer
After finding a real estate agent to represent you, the closing cost reduction opportunity presents itself during the negotiation phase. Sellers have a lot of leverage in competitive home markets. If you negotiate well, the buyer may be willing to pay more closing costs than is typical in your location. However, it is not typically the best way to maximize your profit and savings from the sale of your home. The buyer typically pays closing costs and may not have a large financial reserve. Most purchasers would rather pay for a higher home price than pay more in closing costs.

Hire a Low-Commission Realtor
Hiring a low-commission realtor is the greatest and simplest method to keep more money in your pocket at closing. The real estate commission is often the largest closing fee when selling a home. For most sellers, even a modest price cut means substantial savings.

Shop Around
You can save money on some closing expenses if you shop around as the closing date approaches. In real estate transactions, for instance, the buyer typically selects the escrow company, often on the advice of the buyer's agent or lender. However, sellers can search for a reputable escrow company that charges reasonable fees and then recommend the company to their prospective purchasers.

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