Closing Costs

“How much money will I need to pay at closing?” As a Realtor, that is a question I get asked often. Just like everything in real estate, that depends! It can depend on numerous factors such as: what state you live in, if you’ve negotiated any seller concessions, the purchase price of the house, utilities, etc. 

Typical closing costs are 2%-5% of the purchase price of the home. For example, for a home worth $300,000, closing costs can range from $6,000-$15,000. 

What are you paying for when you pay closing costs? It will be different for each transaction but typical fees/charges include:

•  Lender fees related to the origination and underwriting of a mortgage loan

• Real estate commissions

• Property taxes

• Insurance premiums

• Utility transfer 

• Title and recording fees 

• Attorney fee

• Mortgage Insurance 

• Escrow deposit

• Homeowners Insurance

• Title Insurance (lenders and owners)

• Prepaid mortgage interest 

What are seller concessions? Seller concessions closing costs that the seller has agreed to pay. They may agree to pay some, all, or none of the closing costs. Seller concessions typically happen during a buyer’s market (inventory is high) when buyers have more negotiating power. There are restrictions to seller concessions based on the loan type, so talk to your lender!