What are Closing Costs?

Are closing costs separate than the purchase price?

Buying or selling a home is very exciting for my clients. Part of how we keep it fun and positive is making sure they understand the process and managing their expectations. It is arguably the largest purchase they will make in their lifetime and they are trusting me with helping them make a smart choice on this huge investment.

When they make an offer on home the like the most, they of course, have to pay for it. Like 85% of the buyers in our market, if they are doing a mortgage as part of their purchase, they will have mortgage “closing costs”. These costs are an assortment of expenses, separate than the price of the property, that buyers and sellers normally require to complete a Real Estate transaction. Costs incurred may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges. If the buyer chooses to escrow their taxes and insurance, the closing costs will also include establishing that Escrow account.

For a home buyer, the average closing costs percentage is usually about 2-5% of the purchase price, or say $4,500 on a $180,000 home. As a seller, you also have certain costs to pay as well. Sellers are usually responsible for the real estate agent commission, title transfer fees, prorated taxes and utilities. Other additional costs could be assistance in buyer closing costs, a home warranty, or repair escrows.

Everyone deserves to have a clear idea of the fees they’ll pay at the close of a home sale. In fact, based on the mortgage loan amount of the purchase/sale price, it’s not hard to ballpark either side’s closing costs. Before you get too far along in the process, ask your REALTOR for an estimate. Every sale is different. As your agent, I will consult you early in the process to get a clearer sense of how much money you’ll need to come up with at closing for the sale or purchase of your home.

Whether buying your first home, moving up to your dream home or downsizing, knowing your options and expenses will make the closing process easier and the experience happier.

Call,Email,Text TODAY to discuss your options! Caron (248) 379-6651

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