Closing
Costs
The
bundle of fees associated with the buying or selling of a home are called
closing costs. Certain fees are automatically assigned to either the
buyer or the seller; other costs are either negotiable or dictated by
local custom.
Buyer closing
costs
When a buyer
applies for a loan, lenders are required to provide them with a good-faith
estimate of their closing costs. The fees vary according to several
factors, including the type of loan they applied for and the terms
of the purchase agreement. Likewise, some of the closing costs, especially
those associated with the loan application, are actually paid in advance.
Some typical buyer closing costs include:
- Home Inspection
fee
- Mortage Application
fee
- Mortgage Points
(Origination fee)
- Prepaid monthly
escrow expenses
- Interest rate
buydown
- Appraisal fee
- Survey fee
- Attorney fees
- Title Search
(Title Insurance)
- Recording fee
- Homeowner's
Insurance
- Fuel oil expense
- Flood Insurance
expenses
- Real Estate
brokerage fee
- Miscellaneous
expenses
Negotiating Closing
Costs
In addition to
the sales price, buyers and sellers frequently include closing costs
in their negotiations. This can be for both major and minor fees.
Likewise, a buyer
may want to save on up-front expenditures, and so agree to pay the
seller's full asking price in return for the seller paying all the
allowable closing costs. There's no right or wrong way to negotiate
closing costs; just be sure all the terms are written down on the
purchase agreement.
Prorations
At the closing,
certain costs are often prorated (or distributed) between buyer and
seller. The most common prorations are for property taxes.
For more information
Email or call Jeff at (973) 691-0022 or (973) 347-8713.
