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Who has to pay the closing cost?
Asked By Michael O. | 647 views | Tips Advice | Updated 3 years ago
Answer(5)
Jason Craig
Coldwell Banker
Closing costs are not paid by just one party; they are a collection of fees that both the buyer and seller are responsible for according to custom and the purchase contract. On the buyer’s side, closing costs generally include loan origination and underwriting fees, appraisal, credit report, title search and lender’s title insurance, escrow/settlement charges, recording fees and prorated property taxes and homeowners insurance. If the home is in an HOA, buyers may also pay HOA transfer fees or reserves.
Sellers typically pay the real estate commissions for both listing and buyer’s agents, the deed transfer tax (if any), their portion of escrow or closing fees, any outstanding property taxes and HOA dues through the closing date, and costs to clear title such as satisfying liens. In some markets sellers also cover the owner’s title policy, while in others that is a buyer expense.
Most closing costs are negotiable in the purchase contract. A buyer can request a seller credit toward closing costs in lieu of a price reduction, and local customs sometimes dictate which party covers certain fees. Your real estate agent and lender can provide a detailed estimate of which costs apply in your area and how they can be allocated so you know what to expect before you sign the contract.
Sellers typically pay the real estate commissions for both listing and buyer’s agents, the deed transfer tax (if any), their portion of escrow or closing fees, any outstanding property taxes and HOA dues through the closing date, and costs to clear title such as satisfying liens. In some markets sellers also cover the owner’s title policy, while in others that is a buyer expense.
Most closing costs are negotiable in the purchase contract. A buyer can request a seller credit toward closing costs in lieu of a price reduction, and local customs sometimes dictate which party covers certain fees. Your real estate agent and lender can provide a detailed estimate of which costs apply in your area and how they can be allocated so you know what to expect before you sign the contract.
- 3 months ago
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Spirit Messingham
Tierra Antigua Realty
Normally buyers are responsible for their closing costs, which are the costs they incur to obtain financing for the purchase of the property. Until last year I would typically get the sellers to pay for the buyers closing costs. However, we are experiencing an extreme seller's market currently where I have seen homes sell for up to $150k OVER list price. When sellers have 25 offers to choose from, they certainly will not consider those that dont have the best terms for them (like paying the buyers closing costs). I am also seeing those with VA financing having a hard time getting a contract accepted and those with buyer's contingency (like when you have to list and sell your current home in order to close on the new property).
Recommend you work with a dedicated buyers agent and they explain what you can expect and your local lender to see how much you should expect to pay in closing costs. Good luck! Spirit
Recommend you work with a dedicated buyers agent and they explain what you can expect and your local lender to see how much you should expect to pay in closing costs. Good luck! Spirit
- 4 years ago
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Alfred Galvan
eXp Realty of California
Hello Michael, buyers pay closing cost or the lender might be able to cover it also please reach out to me I can answers all your questions - Alfred
- 4 years ago
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Hector Gastelum
The Gastelum Organization
Michael,
Everything is negotiable. If you don't ask, you don't get.
Everything is negotiable. If you don't ask, you don't get.
- 4 years ago
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Nancy Phander
Coldwell Banker Flanagan Realty
Closing costs are paid according to the terms of the purchase contract made between the buyer and seller. Usually the buyer pays for most of the closing costs, but there are instances when the seller may have to pay some fees at closing too.
- 4 years ago
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