Closing

How Much are Closing Costs and What is in Them?

Are you worried about how much closing costs will run you? Well nobody really likes closing costs except for the third party they are paid to. Closing costs are exactly that, fees paid to the third party who make the sale of a property happen. Usually, they are anywhere from 2% to 7% of the price of the property. So if the home is worth $250,000, you could end up paying anywhere from $5,000 to $17,500.

You won’t be paying this alone, as the buyer’s shoulder most of the cost. Usually buyers are responsible for 3% to 4%, and the sellers are 1% to 2%. Some of the cost can be paid before the deal is closed, but most of it is paid at the end when the keys exchange hands.

How much are closing costs for buyers?

Homebuyers pay most of the closing costs since most of the fees are tied to the mortgage. If you pay cash for the property, there are fewer fees, but still some. Here are a few you should expect to pay.

  • Fee for running your credit report.
  • A loan origination fee, which is the fee for lenders processing your paper work.
  • Taxes, or stamp taxes, which is the tax on your borrowed money.
  • A home inspection fee, checking the home for flaws.
  • A fee for the title search looks for any liens.
  • A fee for the underwriter, who ends up qualifying, or disqualifying you for a mortgage.
  • A fee for the appraisal of the home, matching the home’s value to the mortgage you want.
  • A survey fee for a single-family home, or townhome (not condos).

How much are closing costs for sellers?

  • A closing fee, paid to the title company or lawyers office where everyone meets to close the deal.
  • Taxes on the home sale.
  • A fee for the lawyer of the seller.
  • A fee for transferring the title to the new owner.

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