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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!
