Closing costs can often catch people off guard—especially first-time buyers and sellers. But understanding what’s included can help you budget better and avoid last-minute surprises.
What Are Closing Costs? Closing costs are the fees and expenses, beyond the property price, that are paid when the real estate transaction is finalized. These vary by state, but here’s a general breakdown:
For Buyers:
- Loan Origination Fees: Charged by your lender for processing the loan.
- Appraisal and Inspection Fees: Paid to third parties to evaluate the property.
- Title Insurance and Escrow Fees: Protects against ownership disputes.
- Prepaid Costs: Includes property taxes, homeowners insurance, and sometimes interest.
For Sellers:
- Real Estate Agent Commissions: Typically 5-6% of the sale price.
- Title Transfer Fees and Seller’s Attorney Fees (if applicable)
- Unpaid Property Taxes or HOA Dues
Closing costs usually total 2-5% of the purchase price. We’ll guide you through your specific estimate and negotiate on your behalf when needed. This is an overview so there may be other costs associated with the transaction. Your agent and/or attorney will be able to give an accurate total cost.
