What Are Closing Costs for the Homebuyer?
Don’t forget to include closing costs when you’re considering your finances for buying a house. This costs is separate from and different than the down payment on the home. Closing costs can run from 2% – 5% of the home’s final purchase price. What are the closing costs for the homebuyer? Here’s a sample list of possible items that may be included in the closing costs.
Escrow Fees
The escrow fee is paid to the escrow company. This is the impartial company that holds the earnest money you provided when you decided to purchase the home. The escrow officer handles all the paperwork associated with the funds and important documents that pass between buyer and seller.
Titles & Homeowners Insurance
A fee will be charged to do a title search and make sure that the property is free of any restrictions that would stop the purchase. This is important to insure that there are no liens, unpaid fees, or third-party claims on the home. A title insurance fee may be charged to offer a layer of protection to the buyer when it comes to the title search.
Homeowners’ Insurance is required when you purchase a home. The type and cost of policy may vary, but you should consider this a vital part of your closing costs. As the buyer, you may be required to pay a year’s worth of insurance at closing.
Records & Legal Costs
Fees included in this category include any attorney fees that are associated with your attorney or the attorney for the seller during the closing on the house. This varies depending on the number of attorneys used during the process. The closing may be managed by one attorney that represents both parties. Alternately, each party may choose to have their own closing attorney present.
Filing paperwork to change the ownership of the home may have fees. Included in this portion of the closing costs are notary fees, stamps, filing fees, and any taxes associated with the administrative process.
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Property Taxes & Lender Costs
The lender may require that you pay a certain amount of the taxes for the home up front. This can be a fee that most buyers don’t anticipate. Check with your lender to get the specifics on their requirements when it comes to how property taxes are handled during the closing process. Depending on the time of the year, the seller may have paid the current taxes due. In this case, the buyer may be required to pay a part of the amount already paid.
Inspection Fees
These fees may include inspection of the home for appraisal purposes or to determine if there are any structural or insect problems. Fees may be paid to have the property surveyed to insure that the property lines and size of property are correct.
The process of closing on a home is the final step in buying your home. The cost associated with the closing are necessary, but they need not cause extra stress or add an element of surprise. Your settlement form should include an estimate of good faith prior to the actual closing date. This will help you plan ahead and take the stress out of the process.
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Having a knowledgeable real estate professional on your side during this process is valuable. They’ve gone through this process many times and know exactly what to expect. They can guide you and help you prepare ahead. Your real estate agent will be available to answer any questions and handle the details of paperwork so that you can focus on the excitement of buying your new home.
Keep in mind that closing costs are sometimes negotiable and can be paid by the buyer and the seller, depending on their agreement. Talk to your real estate agent about the specifics of negotiating closing costs when you’re considering the purchase of a home.
Call The Laura Castillo Group at 806-401-4217 for any questions related to closing costs or the home buying process. You don’t have to go through the home buying process alone. We have the knowledge and experience to help make this process as smooth as possible.
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