Here’s what both buyers and sellers need to know about closing costs.
Closing costs are different for buyers and sellers. For buyers, closing costs are primarily related to getting the loan. They will be things such as the appraisal fee, loan origination fee, insurance costs, attorney fee, etc. For sellers, closing costs are mainly the real estate fee and an attorney fee. However, it’s important to note that who pays the recording fee varies depending on where the home is located. If it’s in South Carolina, it’s usually a seller’s expense, in Georgia, it’s generally a buyer’s expense.
Buyers commonly ask whether the sellers will pay for their closing costs. In a less aggressive, competitive real estate market that may have been a possibility, but we’re not seeing that these days. If you need to know what your closing costs would be as a buyer, the best thing to do is go to your loan officer, get pre-qualified, and ask: “If I were to buy a house at $225,000, what would my closing costs be?” That way you’ll know whether you have enough money saved up, or you’ll have to work something out with the seller to help with closing costs.
“Who pays the recording fee varies depending on where the home is located.”
Sometimes the seller can help by taking a bit of money from their proceeds at closing. For example, if the house is listed at $225,000, but the listing agent thinks the house might appraise for $230,000, the buyer’s agent might decide to make an offer that bumps the price to $230,000 but ask the seller to contribute $5,000 toward the buyer’s costs at closing. The seller is getting the $225,000 price, but the buyer has increased their loan amount to help cover closing costs. However, the key to this is that the house appraises for $230,000; that’s critical in today’s market, especially with prices being pushed up.
If you have questions about closing costs, buying, or selling, give us a call or visit our website. My team and I are on standby seven days a week to help you.