Funny you should ask; we actually represent one of these. Closing costs fall into different categories and are paid by the buyer or seller individually. We’ll break them into categories and client type for you.
Buyer Closing Costs
- Lender Fees
- Usually, add up to between one and two percent of your purchase price
- This includes your application fee, discount fee, processing and underwriting fees, wire transfers, and credit report.
- Usually, add up to between one and two percent of your purchase price
- Property Insurance
- The average cost of a homeowner’s insurance premium is $1,312 per year.
- This amount is typically paid in full at the time of closing.
- The average cost of a homeowner’s insurance premium is $1,312 per year.
- Appraisal
- Estimated at, or between, $300 to $500.
- This is generally paid upfront or at closing and is required by most lenders.
- Estimated at, or between, $300 to $500.
- Property Tax Reserves
- Two or three months
- This is requested by most lenders and the rate varies by city or county and lender.
- Two or three months
Seller Closing Costs
- Property Taxes
- If you’re due property taxes you’re responsible for them at this point, up to the closing date.
- Possible Property Liens
- Your buyer will be receiving a clean title, which means that if there are any liens on the property, inclusive of a mortgage or line of credit, and so on, the seller’s proceeds will go to cover them.
- Transfer Taxes
- These amount to zero to two percent of the sale and are due to transfer the deed of the property.
- These are usually paid by the seller but can be negotiated to split with the buyer.
- These amount to zero to two percent of the sale and are due to transfer the deed of the property.
- Real Estate Commissions
- Usually between two and six percent of the sales price.
- You could split this cost in negotiations by asking the buyer to pay a portion.
- Usually between two and six percent of the sales price.
- Title Fees
- One percent of your total purchase price.
- Inclusive of notary fees, title search fees, and title insurance.
- One percent of your total purchase price.
- Pending Utility Bills
- Any utility bills to the date of closing are also your responsibility. You can’t leave anything pending.
Here’s hoping this clears up a few items, if you need to add us to your closing costs we’re happy to be there to help you receive the free and clear title to the home of your dreams.
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