A lot of people think that selling a home is as simple as setting an asking price and having a buyer pay it. This isn’t the case, however, because there are a variety of closing costs associated with the sale. “Closing costs” is a blanket term that real estate professionals use when referring to the costs sellers and buyers have to pay to finalize a real estate transaction.
To know more about what these are and how they’re paid for, read through the sections below!
What Are Closing Costs?
There are many costs associated with a home sale, and both the buyer and the seller have their fair share of costs to pay. Some of the costs are associated with the property, like the cost of an appraisal and the cost of a title search. Other costs are associated with the paperwork, such as the cost of hiring an attorney and the cost of originating and underwriting the loan.
As the name implies, closing costs must be paid in full at the time of closing, and usually they’re paid for with a cashier’s check.
What Do You Pay At Closing?
- Loan origination fees
- Appraisal & survey fees
- Title insurance
- Homeowners insurance
- Private mortgage insurance (PMI)
- Property tax
- Escrow fees
- Attorney fees
- Miscellaneous fees
How To Calculate Closing Costs
Your lender is obligated by law to provide you with a Loan Estimate (LE) within a few days of receiving your mortgage application. You’ll receive your final closing disclosure, which includes a breakdown of your closing costs, once your loan is granted. Check your closing disclosure against the Loan Estimate (LE) you received when you applied for the loan.
Can Closing Costs Be Negotiated?
Yes, closing costs can be negotiated. In fact, this is something you may have to resort to if you want to get a property off your hands fast. Perhaps you’ll cover more of the smaller fees so the buyer doesn’t have to. You could also pay more closing costs in exchange for keeping the asking price high.
To Sum Up
Closing fees are an inevitable part of the home-selling process, and who pays what largely depends on a variety of factors. Closing costs typically amount to 8-10% of the selling price. But since the seller usually pays both the selling agent’s and the buying agent’s commissions, they almost always pay more than the buyer. Do you wish to avoid all these expenses when you sell a property? Sell your house to Diamond Home Buyers, a reputable cash home buyer in Ontario, CA. We buy houses in Ontario, CA as is, and when you sell to us we’ll cover all the closing costs.