What are closing costs?  How much are closing costs? 

Important points to know:  There are closing costs when buying real estate such as a home, a commercial property, land, etc. There are closing costs when selling real estate, too. Usually buyers cannot pay closing costs with their home loans meaning they need to have other funds available. Closing costs are in addition to the purchase price of the property, so buyers and sometimes sellers need to budget for closing costs.

Note:  The official term for finalizing a real estate sale is “settlement”.  That’s when buyers and sellers sign a pile of documents prepared by a settlement firm and then ownership of the real estate officially transfers from the owners to the buyers.  The word “closing” infiltrated this process and is a commonly used word referring to settlement. So, the words “settlement” and “closing” can be interchangeable.

Closing costs vary per real estate transaction. The items included in closing costs and their amounts depend on the location, the specific property, the contracted sales price, the settlement schedule, and other factors.  The amount buyers and sellers will pay for closing costs can only, at best, be estimated until they have a particular property under contract.  A real estate agent or settlement firm in your area can provide insight into what is included in closing costs where you intend to purchase real estate.  Even though you won’t know the exact amount until you have a contract on a property, it is important to have an estimated calculation before you start your property search so you can budget for the costs.  Imagine having a legally binding contract for a property and then discovering you can’t get the extra funds to pay closing costs.  Ugh.

Here are some items that may be included in your closing costs:

• Taxes (city, county, state, public transit, transfer, and others)
• Settlement firm fees
• Title research fees
• Title insurance fees
• Title binder and examination fees
• Brokerage fees
• Deed registration fees
• Appraisal fees

Veteran Realty assists clients with purchases, sales, leasing, and property manage of residential and commercial real estate. Contact us via our Contact page or calling 540-571-4911.