Don't Get Caught Off Guard With Closing Costs

Posted by Tom Crimmins Realty, Ltd. on Friday, January 17th, 2014 at 3:07pm.

Home sale closing costs can take you by surprise. Here is an estimate of what a buyer or seller can expect in the way of residential closing costs - but always be sure to discuss this with your real estate attorney or mortgage rep.

Closing Costs are fees for final property transfer not included in the price of the property. Typical closing costs include charges for the mortgage loan such as origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate professional fees, prepayment of taxes and insurance, and real estate transfer taxes. 

Here are the breakdowns:

A buyer utilizing a loan can expect between 4.5 and 6% of the purchase price depending on the loan amount.

A buyer paying all cash can expect between 2 and 3% of the purchase price.

A buyer usually pays seller's transfer tax with new construction.

A seller otherwise pays transfer tax on a resale home.

$500,000 (or under) is 1.4% (x.014)
$500,000 (over) is 1.825% (x.01825)

A seller should add realtor commission, loan payoffs and also add approximately $1,500 for miscellaneous legal and title fees.

How to avoid closing costs?

Purchasing a home is always about negotiating. Negotiating a closing cost with the seller will reduce the price of the closing cost. Look into the no-closing cost mortgage for the best and lowest interest fees.

It's all about timing. Did you know it is better to close at the end of the month? If you close at the start of the month, you pay for an entire month of interest. However, closing at the very end allows you to only pay a small fraction of a month's interest.

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