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How Much are Closing Costs?

July 19, 2023
How much are closing costs

Both buyers and sellers have to pay for closing costs. Buying the house of your dreams is a stressful process but make sure that you properly estimate closing costs. Once you have finalized your house and have loan approval, there are a few more formalities that need to be completed before you receive the keys to your house. One of those formalities is paying the closing costs.

What are Closing Costs? 

Closing costs include multiple fees for the services that a seller and buyer pays to close a real estate transaction. Both seller and buyer have to pay certain closing costs.

How much are Closing Costs ?

Closing costs typically occur when home ownership passes from seller to buyer. The total expense for closing costs may vary according to the location and actual price of the property.

Average closing costs for buyers may range between 2% to 6% of the loan amount. While the average closing costs for sellers can range between 8% to 10% of the sale price of the property.  The best way to pay for these costs is to pay from your own pocket as a one-time expense. 

Who Pays the Closing Costs?

Both the parties i.e. buyer & seller have to pay closing costs. Majority of the closing costs expense is borne by the buyer, while the seller has to pay a few of then such as the real estate agent’s commission and transfer tax.

How much are Closing Costs for Seller?

Sellers cannot escape without paying certain closing costs like buyer’s agent commissions, property taxes, HOA fee and title fees. Check out below the list of closing costs for seller:

Property Closing Costs:

  1. Home Inspection fee
  2. Home Warranty Fee
  3. Utility Bills
  4. Owner’s Title Insurance
  5. Municipal Lien Search
  6. Credits Towards Closing Costs

Mortgage Closing Costs:

  • Mortgage Payoff

Administrative Fees:

  1. Attorney fees
  2. Escrow fee
  3. Settlement Fee/Escrow Fee
  4. Real Estate Agent Commission

Government fees and real estate taxes:

  1. Property taxes
  2. Documentary Stamp/ Transfer Tax

HOA Fees:

  1. Homeowner Association (HOA) Fee/ Document Fee
  2. HOA Estoppel Fee

How much are Closing Costs for Buyer?

Buyers have to usually pay most of the closing costs such as attorney fees, appraisal fee, credit reporting fee and few more. Check out below the list of closing costs for buyer:

Property Closing Costs:

  1. Home Inspection fee (Pest inspection + lead-based paint inspection)
  2. Home Appraisal fee
  3. Title Search fee
  4. Title Insurance fee
  5. Homeowners Insurance
  6. Flood Certification
  7. Survey fees
  8. Application fee

Mortgage Closing Costs

  1. Credit reporting fees
  2. Discount points
  3. FHA mortgage insurance
  4. Loan Origination fee
  5. Prepaid daily interest charges
  6. Private mortgage insurance
  7. Rate lock fee
  8. Underwriting fee
  9. VA Funding fee
  10. Mortgage Impound account

Government fees and real estate taxes

  1. Property tax
  2. Recording fees
  3. Transfer tax/ documentary stamp tax

Administrative Fees

  1. Attorney fees
  2. Settlement/Closing fees
  3. Escrow fees
  4. Loan-tie-in-fees
  5. Courier fees


HOA Fees

  1. Homeowners Association transfer fee
  2. HOA estoppel fee

Average Closing Costs

RegionStates/CitiesAverage Closing Costs
NortheastStatesAverage Closing Costs in Connecticut | Average Closing Costs Maine | Average Closing Costs Massachusetts | Average Closing Costs New Hampshire | Average Closing Costs Pennsylvania | Average Closing Costs New York | Average Closing Costs New Jersey | Average Closing Costs New Jersey | Average Closing Costs Vermont |
MidwestStatesAverage Closing Costs Illinois | Average Closing Costs Indiana | Average Closing Costs Iowa | Average Closing Costs Kansas | Average Closing Costs Michigan | Average Closing Costs Minnesota | Average Closing Costs Missouri | Average Closing Costs Nebraska | Average Closing Costs North Dakota | Average Closing Costs Ohio | Average Closing Costs South Dakota | Average Closing Costs Wisconsin
SouthStatesAverage Closing Costs Alabama | Average Closing Costs Arkansas | Average Closing Costs Delaware | Average Closing Costs Florida | Average Closing Costs Georgia | | Average Closing Costs Kentucky | Average Closing Costs Louisiana | Average Closing Costs Maryland | Average Closing Costs North Carolina | Average Closing Costs Oklahoma | Average Closing Costs South Carolina | Average Closing Costs Tennessee | Average Closing Costs Texas | Average Closing Costs Virginia | Average Closing Costs Washington | Average Closing Costs West Virginia |
WestStatesAverage Closing Costs Alaska | Average Closing Costs Arizona | Average Closing Costs California | Average Closing Costs Colorado | Average Closing Costs Hawaii | Average Closing Costs Idaho | Average Closing Costs Montana | Average Closing Costs Nevada | Average Closing Costs New Mexico | Average Closing Costs Oregon |Average Closing Costs Utah | Average Closing Costs District of Columbia | Average Closing Costs Wyoming |

Conclusion

Closing costs are inevitable part when buying or selling a property. For sellers, they must be updated about closing costs because it is crucial when calculating listing price of property. For buyers, before you begin house hunting, get preapproved for loan, this way you get a clear picture about what your closing costs could be. You might also be able to save some amount of money on closing costs if you negotiate with your lender.

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