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Closing Cost: Who Pays What?

Closing Cost: Who Pays What?

Closing Costs for Sellers

½ of the Title & Escrow Fees

Fees such as transfer taxes, title insurance, notary fees, etc.

Commissions

Average Real Estate Commission is 6% in the Columbia Market

Loan Payoff

Outstanding mortgages balances would be satisfied at closing.

  • Home Warranty (optional)
  • Property Taxes (Prorated)
  • RE Brokerage Administration Fees
  • Pest or Septic Inspection
  • HOA Fees (prorated)

Closing Cost for Buyers

½ of the Title & Escrow Fees

Fees such as transfer taxes, title insurance, notary fees, etc.

Lenders Fees

For obtaining a mortgage including the appraisal.

Homeowners Insurance

Typically one year of hazard or homeowner’s insurance is paid up front at closing.

  • Owner’s Title Insurance
  • Inspection Fees (in Escrow)
  • Earnest Money (credited at closing)
  • RE Administration Fees (if applicable)

Credit Report Fee

All costs and fees can be negotiated in the Sales Contract. Buyers can ask Sellers to pay closing cost on their behalf. Sellers have an option to do so to get the home sold. Sellers must be prepared to pay for repairs, a home inspection is recommended up front to make repairs so the buyer does not find anything when they do their home inspection. Sellers can help in the sales process by being proactive and taking care of a home inspection, pest control and termite bond, and having the HVAC inspected and serviced before listing the home on the market.

Buyers and Sellers be Aware that a $1000 only reduces a mortgage by $10 a month at most. Both parties have to be ready to negotiate. Tax prorations vary and the Attorney. Closing cost can run between 2% – 5% of the purchase price.

The Good Faith Estimate (GFE) requests a copy of this estimate from your agent or lender, you’re legally entitled to receive one within a few days of applying for the loan… Note this is an estimate. The Settlement Statement is given before closing. You should be able to receive a copy of this document a few days before closing. Review the charges, compare with the GFE and be sure to ask any questions that you have. Compare these two documents are identical on everything except price. Any difference in charge should always be within 10% of the GFE value. Ask your professional to explain any changes.

Did you know that Federal Law requires that Sellers and Buyers receive a copy of the HUD-1, or settlement. The HUD-1 is a form outlining all charges in a Real Estate transaction. Do not be shocked at closing! Ask your Lender, Agent, or Attorney to explain all of your costs well before going in to sign your final documents if you have questions.

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Tiffanie Flagler

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