Who Pays What In A Real Estate Transaction?

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When you are buying or selling a home, people often overlook how much a transaction will actually cost them. Closing costs vary widely based on where you live. 

First, What are closing costs?  
Closing costs are fees associated with the closing of a Real Estate Transaction. The closing is when the title of the property is transferred from Seller to Buyer. Costs are incurred by either the Buyer or Seller; however, the Seller is able to pay part of the closing costs for the Buyer. 
As a Buyer some of the additional costs you will incur to purchase a home may include items such as: credit report fee, loan origination fees, attorney fees, appraisal fees, discount points, survey fee, title insurance, title search, inspection fees which include your full home inspection, pest inspection and in our area of Central Ohio a Radon inspection, you will have underwriting fees on your loan as well and then a recording fee. At the onset of acceptance of your offer you may also have an earnest money deposit due to the Seller. This can be subtracted from the total monies you bring to the closing table or you will receive a check back at the closing table for this. 

At they end of the day a typical home Buyer with pay between 2-5% of the total purchase price of their home in closing fees. 

On another note, the Seller is able to contribute to your closing costs or give you closing concessions. For example a Seller can contribute up to 6% of the price in closing costs for an FHA Buyer, 4% for a VA Buyer and 3% for a Conventional Buyer. 

Please keep in mind though that at the end of the day a Seller does not generally list their home for a specific fair market value and then raise that a percentage with the thought they will contribute to your closing costs as a Buyer. So in a strong sellers’ market you may need to go at or over list price to make your Offer as a Buyer more palatable to a Seller.  

Lenders are required, by law, to give you loan estimate once you complete your intent to proceed with them and make full loan application which you will do within the first week of entering into a Purchase Contract.  

We would be happy to discuss more in depth the investment you make as a Buyer into your new home journey! 

With over 100 years of combined real estate experience and over 400 families served in 2015, put The Raines Group to work for you!


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