Everyone knows about a down payment, or at least they've heard of it. Most of the time people *falsely* think that you have to have a 20% down payment, but truly it's a lot less. But almost no one knows about closing costs. So there's this mysterious fee that's floating out there that oftentimes buyers have questions about. And frankly, so do a lot of sellers because it's been a while maybe since they've gone through the buying process.
And so when we start talking about selling someone's home and considering what the buyer's closing costs might be or even the seller's closing costs might be, it can be somewhat of a mystery. So at the end of the day, closing costs are mostly made up of the fees that either the bank or the county, the insurance, things like that that make up the legal sale of a property. At the end of the day, these fees is what pays everyone that's making sure that when it's all said and done, you legally own the house. So things like your recording deeds. So making sure that the county actually records the deed and gets your name put on the property is a piece of that. Origination fees or buying down mortgage points, go to the bank to make sure that everyone that's involved in getting that process done get those fees covered.
Of course, you got to pay your taxes. Taxes are part of every deal that we do in America. And so real estate is no different. But the other thing is insurance. Homeowners insurance most of the time has to be paid upfront. And so this covers the beginning of your homeowners insurance. So how much can you expect to spend?
Well, on average, I'd say about a $5,000 closing costs expectation is realistic. It could be a little more, could be a little less. I will say that real estate is very quickly changing. So we've seen that go up and down and depending on the way that a seller has their house listed, could determine some of the different fees that are involved or not covered. And so those are all things to compare, especially things to compare when you're shopping from one lender to another.
Yes, you want to look at their rates, but you also want to see, okay, what are their costs going to be compared to this other one? In my experience, that's what makes the biggest difference between a local trusted lender and some of the other big guys that we don't know as well. So all that said, keep in mind closing costs. Now there are a few tricky ways that we can use to try to either finance those in where you're not having to write such a big check when it comes time to close or get the sellers to possibly pay those for you. However, in this market it's always a 50/50 shot.
So if you have more questions about closing costs, how do I get that $5,000, $4,500, $6000, whatever. How do I get that covered? Let's have a bigger conversation. Let's sit down and chat through what that looks like for you.
I hope this helps!
