In addition to the sale price of the home, a home buyer can expect to pay closing costs to assume legal title of the new property. There are a variety of fees and expenses that the buyer and the seller will have to pay at the time of closing. The buyer’s lender must provide a good-faith estimate (GFE) of all settlement costs. The closing attorney or title company will provide you with a closing statement prior to closing for review. A common estimate of a Buyer’s closing costs is 2 to 4 percent of the sale price of the home. A Seller’s closing costs are typically 3 to 9 percent of the sale price. I will review the fees on the settlement statement with you to ensure everything is correct.
The closing settlement statement will include charges for:
- Down payment & deposit
- Loan origination fee Points, or loan discount fees, which you pay to receive a lower interest rate
- Home inspection
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowner’s insurance, if being paid as part of the mortgage
- Property tax prorations
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording
- Title insurance policy premiums
- Notary fees
- FedEx/Courier fees
- Utility prorations
Costs which are prorated on the statement will be calculated and split between the buyer and seller based on the time occupying the property during the proration period. For example, Broward County Property Taxes are sent at the end of a calendar year and are paid in arrears, fulfilling the tax obligation for that year. If you close on a home December 1st, you would only be responsible for the property taxes for December of that year, and will receive a credit on your closing statement for the January thru November amount. You will be responsible for paying the entire tax bill, but will have received the credit at closing.