When it comes to closing a real estate transaction, it is important to have a solid understand of the settlement process. Closing costs are the fees due (financial responsibilities) by both the buyer and the seller at the time of sale and vary according to a number of factors. If the prospect of buying or selling a home is in your near future, you may be interested in learning what your associated settlement expenses might entail.
How Are Closing Costs Determined?
Closing costs are determined based on loan amount, taxes, mortgage insurance, and other fees. For buyers, closing costs generally average between 3 – 6% of the total purchase price. Seller costs are derived from deed preparation and other administrative fees and typically hover around 6 – 10% of the sale price, with bulk of these expenses resulting from real estate commission.
What Do Closing Costs Include?
While total closing costs may be unique to each individual sale, buyer and seller settlement fees generally include the following:
Buyer closing costs:
-Mortgage insurance, origination fee, and loan discount points (if applicable)
-Home appraisal fee
-Title search and recording fees
-Lender’s and owner’s title insurance
-HOA fees (if applicable)
-Boundary survey fee (if applicable)
-Other settlement/administrative expenses
Seller closing costs:
–Loan payoff amount
-Deed preparation and courier fees
-Title transfer and recording fees
-Home repairs (if applicable)
-Seller concessions (if applicable)
-Other settlement/administrative costs
For more information about closing costs or the settlement process in general, contact Linear Title and Escrow today!