If you're in the market for a new home, it's important to factor in all the costs associated with the home-buying process. One key aspect that is often overlooked are the closing costs. Closing costs are the fees associated with the transfer of ownership of a property from the seller to the buyer, and they can add up quickly.
In this blog post, we'll break down the estimated buyer closing costs for a typical home purchase in the United States. While the costs may vary based on your location and lender, this breakdown will give you a good idea of what to expect.
Title Search - $450.00 Before purchasing a property, it's essential to ensure that the seller has a clear and legal right to sell it. A title search involves a thorough examination of all public records related to the property to make sure there are no liens, judgments, or outstanding taxes that could affect your ownership. The cost for this service usually falls around $450.00.
Recording Fees - $250.00 Recording fees are paid to the county where the property is located and are based on the number of pages of documents that need to be recorded. For a typical home purchase, the cost usually falls around $250.00.
Attorney's Fees - $1,250.00 Attorney fees vary depending on the type of property and transaction. A real estate attorney will help you navigate the complex legal aspects of the home buying process, from reviewing contracts to ensuring that the transaction meets all legal requirements. Attorney fees for a typical home purchase usually fall around $1,250.00.
Attorney's Costs - $50.00 Additional costs that may be associated with hiring an attorney include wires and Federal Express charges. These charges usually fall around $50.00.
Title Insurance - Varies Title insurance is a one-time fee that protects you from financial loss in case there is a defect in the title of the property you're purchasing. The cost of title insurance varies based on the purchase price of the property and the level of coverage you choose. As an example, if you're purchasing a $500,000 property, expect to pay around $2,122.00 for expanded owners and lender's coverage.
Other Costs to Consider In addition to the above costs, there are several other expenses to consider, including:
- Homeowner's Insurance - A lender will require you to have at least one year of homeowner's insurance paid in advance before closing.
- Reimbursing the Seller - The seller may have already paid property taxes, sewer use charges, homeowner's association fees, oil, or propane. You may need to reimburse them for these costs.
- Lender Escrow Account Payments - Your lender may require you to make escrow payments for property taxes and insurance.
- Prepaid Interest - You may need to pay for the remainder of your closing month's interest, and you'll skip your next mortgage payment.
- Move-In Fees - Some homeowner associations may require move-in or capital contribution fees.
While the estimated buyer closing costs may seem overwhelming, it's important to remember that they're necessary to protect your investment in the property. Make sure to budget accordingly, and don't be afraid to ask your lender or real estate agent for more information about these costs. At The Riverside Realty Group, we are committed to helping you navigate the home-buying process and answering any questions you may have. Contact us today for expert guidance!