FSBO Property - Homes For Sale By Owner
We send out FREE Real Estate articles about twice each month. It covers things we see currently happening in the market, creative and useful things we see people doing, and ideas that have worked for sellers and buyers. You can receive them if you like. Sign-up
Who Pays Closing Costs
Buying or selling a home is a euphoric experience for both of the parties involved. This euphoria can cool when you get to the issue of who pays closing costs.
Who Pays Closing Costs
When looking to buy or sell a home, every person eventually arrives at the question of who pays closing costs on the transaction. To put it simply, both buyers and sellers typically pay some of the closing costs. However, the exact amounts paid can vary significantly from area to area and depending on what agreements the buyers and sellers come to in the offer-counteroffer process.
It is important to research the area you are looking to buy or sell in and be knowledgeable regarding any laws and standards of practice for the area. Yes, the requirements are different in each state and often each city. Know what you will have to pay ahead of time so you can be prepared to cover these costs. Here are some examples of what buyers and sellers generally have to pay.
Buyers typically pay the following closing costs: fees charged for obtaining a mortgage; inspection fees; homeowner's insurance (must be prepaid for one year at closing); transfer taxes if there are any (although the seller may pay these or they may be shared 50-50 between buyer and seller); title insurance and escrow fees (varies depending on the location); and attorney's fees (if and where attorneys are involved in the transaction). If you are confused, a mortgage broker can tell you which fees are customarily paid for by the buyer in your area and how much they will cost. When buying a home, the use of mortgage brokers is highly recommended to both get a great deal on a mortgage and help with the transaction itself. The broker only gets paid if the deal goes through, so you know they will make every effort.
Sellers' closing costs typically include: loan payoff fees; the real estate commission (in some cases, a portion of this may be paid by the buyer); title insurance (depending on the location); termite repairs (this is negotiable in some areas); cash payments in lieu of repairs to the property; all or part of transfer taxes and escrow fees, if there are any; attorney's fees where applicable; and other fees set by local custom or negotiated during the transaction.
As can be seen, the costs in both cases can pile on top of one another and can quickly amount to expensive closing costs. Knowing and researching the area you are buying or selling in is critical to know the exact costs that will have to be paid. In any case, the question of who pays closing costs and the estimated amounts is information you need to know as early as possible.
Get Free 1 Month Listing