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What are Closing Costs?
Closing costs are any fees related to the official sale of the home, typically to any third party that has participated in the sale. Closing costs can vary between 2-7%, and can be negotiated between the buyer and the seller. They are added onto the price of the home at the very end of the process.
Who Pays Closing Costs?
Both the seller and the buyer will pay a portion of the closing costs, though the buyer usually shoulders more of the burden, due to the actions needed on their part and the mortgage process. Some of these costs can be negotiated between buyer and seller, but that is a gray area that will need to be decided before the closing.
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How to Calculate Closing Costs for Buyers
Because buyers need mortgages, they naturally shoulder more of the closing cost burden. Your lender should have a specific list of costs associated with closing before you need to sign for a mortgage. The buyer also needs to cover any services used to verify the home is worth buying, like inspections or other investigative costs. Here are just some of the closing costs that home buyers will typically need to cover:
- Loan origination fee
- Credit report fee
- Underwriter fee
- Appraisal fee
- Home inspection
- Title search
- Survey fee
- Stamp taxes on home loan
How to Calculate Closing Costs for Sellers
Closing costs are naturally less for home sellers, because they don’t need mortgage services or inspections. These costs may be negotiated, especially if both parties require whatever is being provided:
- Closing fee for the title company or attorney’s office
- Taxes on the sale of the home
- A fee for an attorney, if any
- A fee for transferring the title of the home
How Much are Closing Costs?
It’s very difficult to calculate closing costs in advance. There are a lot of factors that are involved, and each of these factors could change throughout the process. For instance, if you don’t have an attorney now and you’re the seller, you might have to hire one toward the end of the process. Closing costs are also heavily influenced by the selling price of the home and local taxes. For instance, Nevada has lower closing costs than most states, but those can vary depending on the price of the home itself. You may be able to find a closing cost calculator online, but beware: it should only be used as a very rough guideline.
If you’d like advice on selling your home or buying a new home, contact Galindo Group of Las Vegas. We would love to walk you through the process and help in any way we can!