Closing Costs
Closing costs are the fees and expenses—separate from the purchase price—that buyers and sellers have to pay to complete a real estate transaction. They typically come due at the "closing," which is the final step when the property officially changes hands.
What are closing costs?
They’re a collection of various fees required to process and finalize a home sale. Think of them as the “paperwork and logistics” costs that come with legally transferring ownership of a property.
Who pays them?
Both the buyer and the seller may have closing costs, but buyers usually pay more. However, these costs can be negotiated as part of the deal.
Examples of common closing costs for buyers:
How much are they?
Usually around 2% to 5% of the home's purchase price for buyers. So for a $300,000 home, closing costs might be between $6,000 and $15,000.
What are closing costs?
They’re a collection of various fees required to process and finalize a home sale. Think of them as the “paperwork and logistics” costs that come with legally transferring ownership of a property.
Who pays them?
Both the buyer and the seller may have closing costs, but buyers usually pay more. However, these costs can be negotiated as part of the deal.
Examples of common closing costs for buyers:
- Loan origination fee: Charged by the lender for setting up the loan.
- Appraisal fee: To determine the home's market value.
- Title insurance and title search: Ensures the property is legally yours and no one else has a claim.
- Escrow fees: Charged by the third party managing the transaction.
- Recording fees: Paid to the local government to record the sale.
- Prepaid taxes and insurance: Sometimes you have to pay some property taxes and homeowners insurance upfront.
How much are they?
Usually around 2% to 5% of the home's purchase price for buyers. So for a $300,000 home, closing costs might be between $6,000 and $15,000.