Ama Adeniyi
762-271-0181
Most people know that when you buy a house there are closing costs associated with the purchase, but many people don’t know exactly what those costs are. In this post we will outline who pays for what when it comes to closing costs.
For buyers. Upfront costs are those that must be paid at the time of purchase. For sellers closing costs, which include paying off their mortgage and transferring the property title to the buyer. Let’s take a closer look at each type of cost.
Buyers Closing Costs:
Appraisal Fee: In some cases, mortgage companies will require a separate appraisal just for the buyer’s transaction before they will approve a loan. This is called an appraisal fee or buyer’s order. The cost of this appraisal typically falls on the shoulders of the buyer.
Inspection Fee: Usually contracted with the home inspection professional on top of their fee since you are using them anyways. Therefore, this is an add on cost. It can also vary depending upon what is included in that part of the inspection itself ie.. pest control inspector.
Credit Report Fee: One of the closing costs that people often forget to add when they’re looking at buying a house, is the credit report fee. It can range from $10 to $30 depending on where you get your credit report and whether you go through a broker or lender for your home purchase.
Loan Origination Fee: Mortgage origination fees are a one-time charge that lenders impose on home purchases. These charges cover the costs of processing loans and can be anywhere between .5% to 1.5%.
Title Search Fee: The title search is an essential process for anyone who wants to buy or sell property. Not only does it reveal any claims on your new investment, but with the information you receive from this due diligence measure comes peace-of mind knowing that there are surprises concerning ownership somewhere out there!
Recording Fee: Recording fees are one of the more overlooked, but important aspects in transferring ownership. They help keep records updated and ensure nobody else tries claiming title before you do!
Homeowners Insurance Fee: Homeowners Insurance is a must-have for those who are planning on buying a home. Your lender might require you to purchase it before or at closing time, depending on the type of mortgage that will be used in conjunction with your purchase contract and where they feel safest about protecting themselves from financial losses.
Seller Closing Cost:
Real Estate Agent Commission: When you sell your home, the cost of commission is on your list of closing costs. This is because there are many steps in getting a buyer and seller together to exchange money for property-related services like inspection or appraisal reports that help with pricing decisions (and ultimately determine what each party will pay).
Transfer Tax: When you sell a house, there is an additional fee that must be paid as percentage of the sale amount. This Transfer Tax weighs in at about 1% for Metro Atlanta.
Title Insurance: This protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances (such as mortgages) in their titles.
Escrow and Closing Fees: Escrow fees can be tricky to understand, but they’re an important part of the home buying process. These costs cover paperwork and exchanges money between two parties involved in your transaction as well any other outside agencies that may need their services for recording deeds or whatever else needs doing at closing time!
Prorated Property Taxes: When a house closes, sellers usually pay prorated property taxes. These are one of the fees included in closing costs that they’re required to cover before ownership can be transferred from them and handed over to someone else!
HOA Fees: The HOA transfer fee is a necessary expense for any home sale. The money covers all of the costs associated with transferring ownership from one homeowner to another, including preparing and distributing documents that update names in databases as well changing security codes or amenity passes if needed
Credits Toward Closing Costs: Closing cost credits are given to buyers at closing time in order for them make repairs on their new homes. The seller will charge you less than what they would have had the home not been sold, but still cover any costs that may come up before or after move-in day!
Closing costs can be one of the most confusing parts of buying or selling a home. If you have any questions or need help understanding your closing cost obligations when it comes to real estate transactions, give me a call at 762-217-0181 and I’ll walk through everything with you step-by-step.
