Who Pays Closing Costs?

Who pays closing costs? This is a question I get a great deal and below I’ll break down the details for you.

The close or settlement is when you sign the final ownership and insurance paperwork and get the keys to your new home.
The closing process technically begins when you have signed a purchase and sale agreement. That agreement should specify a closing date. Typically — from the signing date of the purchase agreement to the closing date it takes about four to six weeks. During this time, purchasing funds are held in escrow, where your money is safe until the deal is officially done.

How Much Will I Pay for Closing Costs?

If you’ve heard people vent frustration with the process of buying a home, then you’ve likely heard complaints about unexpected costs at closing. Let’s unpack what you should expect so you’re not surprised, too.
Closing costs can vary widely by location and your home’s purchase price. Costs are split between buyer and the seller. Buyers can generally expect your closing costs to be 3% to 4% of the home’s sales price. So, on a $300,000 home, you can pay anywhere from $9,000 to $12,000 in closing costs. (Meanwhile, the seller typically pays closing costs of 1% to 3% of the sales price.) However, sellers also pays real estate commissions, so once you add that in, the sellers fees usually exceed the buyers.

Closing fees often include (but are not limited to):

• Commission for the buyer’s agent and seller’s agent
• A loan application fee
• An origination fee, which lenders charge for processing your loan
• The appraisal fee
• Doc prep fee
• Survey
• Deed stamps (transfer tax)
• Credit report fee
• Intangible tax
• Title insurance
• Home inspection fee
• Earnest money deposit
• Property insurance

• Condo or HOA application fee
• Condo or HOA transfer fee
• Recording fees

If you would like more information on this subject please reach out to me on the contact page.