Closing costs are all the fees and payments that are due when you purchase a home, charged by the lenders and third parties involved throughout the entire closing process. These are charges on top of the down payment, principal, and interest related to the mortgage loan.
Buyers typically pay the closing costs however any and all costs can be negotiated in the purchase agreement for the home. Also, there are plenty of fees sellers have to pay at closing in order to tie up loose ends and whatnot. Here’s a complete breakdown of closing costs to be paid, who are expected to pay what and what’s negotiable. If you need more info on the closing process, check out our in-depth guide to the closing process.
The SELLER generally pays for:
- Standard CLTA owner’s Title Insurance
- Real estate agent commission
- Document preparation fee for deed
- Documentary transfer tax ($1.10 per $1,000 of the home sales price)
- Any FHA or VA loan fees required by the Buyer’s lender
- The payoff of all loans in the Seller’s name (or existing loan balance if being assumed by the Buyer)
- Interest accrued to lender being paid off including statement fees, reconveyance fees, and any prepayment penalties.
- Any judgment, tax liens, etc. against the Seller
- Recording charges to clear all documents of record against the Seller
- Tax proration (for any taxes unpaid at the time of transfer to title)
- Any unpaid Homeowners dues
- Any and all delinquent taxes
- Notary fees
- Escrow Fee (50%)
- Seller’s Portion of Sub-Escrow fee
- Demand fees
The BUYER can be expected to pay for:
- Title Insurance premiums (ALTA Loan Policy)
- Escrow Fee (50%)
- Document preparation (if applicable)
- Notary fees
- Recording changes for all documents in Buyer’s name
- Tax proration on (for date of acquisition)
- Homeowner’s transfer fee
- All new loan charges (except or those required by Lender for Seller to pay)
- Assumption/change of record fees for takeover of existing loan
- Recording charges to clear all documents of record against Buyer
- Beneficiary statement fee for assumption of existing loan
- Inspection fees (roofing, property inspection, geological, etc.)
- Fire insurance premium for the first year
- Buyer’s portion of Sub-Escrow fee
- Escrow Loan Tie-In fee
Closing Costs to negotiate in your purchase contract:
- Termite inspection
- Termite work
- Home warranty
- Any city transfer/conveyance tax
- Any bonds or assessments (usually paid by the Seller)
Negotiating closing costs can make or break a real estate deal. Make sure your closing goes smoothly by working with an experienced First Team Real Estate agent.
