Closing costs can add up and have a significant impact on the price of the home. So, it is important that you understand how the costs are divided between the buyers and sellers. The burden of the costs can vary depending on the negotiations on the home, as well as the current trends in the real estate market. But, here are a few general guidelines to show what the buyers and sellers are responsible for paying:
As much as 6% of the sale price can go to the real estate brokers involved in the transaction. The sellers usually cover this cost since the fees come out of the total price of the home.
Sellers sometimes spend money on pre-purchase inspections such as a termite inspection. These reports can be helpful to show the quality of the property when people come to tour the home. Also, it is common for the sellers to pay for the title insurance premiums and their own escrow fees.
Additionally, sellers often have costs for repairs and renovations to prepare the property for the real estate market. Don’t underestimate the value in paying for staging and a few home improvements to boost the overall value of the property.
Most of the costs that need to be handled by the buyers are related to the mortgage loan. Fees might include:
Buyer's Escrow and Title fees
Loan processing and origination fees
Prepaid loan interest and insurance costs
Credit report fees
Prorated property taxes
It is also common for the buyers to pay for an appraisal as well as inspections to identify any potential problems that need to be addressed. These inspections increase the amount of money that is paid, but they are essential to help you avoid costly repairs in the future.
Closing costs are always negotiable between the buyer and the seller. As your representative in the transaction, we assist you with these negotiations and aim to facilitate a smooth transaction with no "surprises".
You don’t need to navigate the details of the closing without assistance. Instead, it is important that you lean on the expertise of a real estate agent who understands everything about the transaction. Call me any time if you have questions about buying or selling a home.