What Closing Costs Do You Have to Pay for at the Closing Table?
July 21st, 2009
Categories:Home Buyer Education
This question was sent to me twice last week, so I thought I would post the answer in blog for anyone else looking for this answer.
Below you’ll find a laundry list of the fees you will most likely see in a real estate transaction. When deciding who pays for what fees, that will depend on what you negotiate when you agree to buy or sell the home. In this market, its a common misconception the seller pays for all the closing costs. While it happens a good deal of the time, it is still very common to see a buyer willing to pay their own costs.
When it comes to negotiating a purchase offer you’ll find one of two scenarios typically play out with the closing costs. Scenario One: The seller pays the closing costs and the sale price of the home remains the same or increases (to justify the amount of the closing costs). Scenario Two: The seller doesn’t pay any closing costs, but they decide to lower the purchase price of the home. Its normally a matter of how much cash the buyer wants to bring to the closing table.
Closing costs will vary from transaction to transaction based on 4 main factors:
- The state you are buying or selling a home in
- The fees charged by the title company
- The fees charged by the lender
- The terms agreed upon in the contract
I’ll break down some of the more common fees into sections. These fees are commonly broken down in a Good Faith Estimate (GFE) and in the HUD-1. The GFE will be given to you by your loan officer before you write a contract (ideally). The numbers on the GFE will only be estimates, hence the “E” in GFE. =) The HUD-1 will come about three to five days before closing and will contain Read the rest of this entry »
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