Answer:
When a home is sold, there are certain expenses, beyond the price of the house itself, that are due from both the buyer and the seller.
These charges, owed to third parties, must be paid at the time of closing and are known as closing costs. Usually, closing costs add up to roughly 2% to 5% of the purchase price of the home. In a VA loan, the seller may also incur a portion of the costs that would otherwise be charged to the buyer. Closing costs are broken down into two categories: those of the buyer and those of the seller.
Bear in mind, although certain fees are usually paid by one or the other, everything can be negotiated. Either the buyer or the seller may agree to cover the costs that are normally assigned to the other.
Buyer’s Expenses:
- Escrow Fees
- Fee for Running credit Report and Application for Loan
- Loan Origination fees
- Underwriting fee
- Inspection Fees associated with any inspection requested by the lender or the buyer
- Title Insurance (which protects the lender in the event that the title is not clear)
- Attorney’s Fee (if any)
- Documentary Stamps on Notes
- Pest inspection fee
- Recording Deed and Mortgage Fees
- Appraisal Fee
- Survey Charge
Seller’s Expenses:
- Documentary Stamps on Deed
- Real Estate Commission (usually 6 %split between the seller’s and buyer’s agent)
- Recording Mortgage
- Cost of Abstract
- Escrow Fees
- Survey Charge
- Attorney’s Fee (if any)
Click here for more information on closing a real estate transaction.
Click here for a closing day cost calculator.
