Closing Costs 101

Both buyers and seller often question closing costs. They wonder what additional costs will they have to pay at the time of closing and how much they will amount to. For starters, closing costs can run between 2-5 percent of the purchase price. Let's take a look at each side of the transaction and what costs the buyer and seller are to expect to pay.

Sellers tend to have higher closing costs than buyers. Sellers should expect to pay 1/2 of Title and Escrow fees, commissions, and loan payoff. Title and Escrow fees are fees such as transfer taxes, title insurance, notary fee, etc. Commission is paid in full by the sellers. The average real estate commission is 5.4% charged to the seller paying both the seller and buyers agent. Loan payoff is the outstanding mortgage balance that the seller has and it will be satisfied at closing. If this balance isn't satisfied the seller must pay the leftover balance.

Buyers have a few different closing costs than sellers. One of the same costs paid for by the buyer and seller would be the other half of the title and escrow fees. Some costs that buyers have that sellers do not are lender fees, and homeowners insurance. Lender fee are the fees for obtaining a mortgage including the appraisal. An appraisal costs around $500. Homeowners insurance is another cost buyers must pay. This is typically paid in full for the first year at closing.

Both buyers and sellers tend to see some additional costs as well. Sellers might see costs such as home warranty fee, prorated property taxes, and prorated HOA fee. These feels can be negotiated. Some additional cost that a buyer might have are owners title insurance, inspection fees, earnest money, and credit report fees. Once you apply for a loan make sure to request a good faith estimate, this will list the basic information about the terms of your loan. Also before closing make sure to review the HUD also known as the settlement statement!

If you have anymore questions about closing costs please feel free to reach out to me! I am available by cell or email ..317-650-5898 or email ermusleh@gmail.com. Also if you or anyone you know is looking to buy or sell, I Would love to help!

Thanks!

Elaina Musleh