Whether you’re buying or selling a home, you can typically expect to pay at least some amount of money in the form of closing costs. These costs can include the long list of fees for the services that are related to researching the home’s title, finalizing the mortgage, and inspecting and appraising the property.
The average closing costs for a home buyer can typically range between 2% and 5% of the amount of the mortgage. So, for the purchase of a $250,000 home with a mortgage of $200,000, you can expect to pay between $4,000 and $10,000.
What exactly do all of these costs represent?
There is actually quite a myriad of expenses, including:
- Property taxes
- Credit check
- Lender’s title insurance policy
- Title policy endorsements
- Title company fees
- Recording fees
- Doc stamps on the deed
- Doc stamps on the mortgage
- Homeowner’s insurance
- Prepaid interest
As a seller, you can also be subject to at least some closing costs on the home sale transaction. These may include payment of the realtor’s commission, credits to the buyer for making repairs, and the payoff of the (seller’s) mortgage balance, if applicable. In some cases, the buyer may request that the seller pay a certain amount of their (the buyer’s) closing costs. The amount of these can be negotiated between the two parties.
Although you will generally have to pay closing costs regardless of which side of the table you are sitting on, a real estate purchase and / or sale could signify that you are moving on to a new adventure in your life.
If you’re planning to buy or sell a home in the Bowie area, give us a call. We can guide you throughout the entire process, and can also answer any of the questions you may have regarding list price, offer price, and anticipated costs to close the deal.