Closing costs are the fees and expenses associated with finalizing a real estate transaction. They typically include lender fees, title services, escrow charges, prepaid property taxes, homeowners insurance, recording fees, and other transaction-related expenses.
Both buyers and sellers generally pay closing costs, although the specific amounts vary by market, purchase agreement, financing terms, and local customs. Buyers often cover many of the loan and settlement-related expenses, while sellers may be responsible for agent compensation, transfer taxes in certain locations, and other seller obligations. Negotiation can also play a role. In some transactions, sellers agree to contribute toward a buyer's closing costs as an incentive.
Because closing costs are usually due at settlement, planning ahead is important. Many buyers focus primarily on the down payment and underestimate the additional funds needed to complete the purchase.
Before closing day arrives, we'll provide you with an estimate of potential costs and strategies will help you prepare for a smooth transaction.
