These documents will comprehensively outline all the closing fees, ensuring transparency in the transaction. Bring them to the closing meeting, as you’ll be expected to hand them over immediately, not at a subsequent time.īy law, both parties involved in the transaction - the buyer and the seller - must be provided with detailed closing documents at least three days prior to the actual closing. It’s crucial to understand the phrase “due when you close.” Ensure you have your payment methods, such as checks or money orders, ready beforehand.
These costs are settled during the final meeting with the closing agent, title company, and/or attorney, where funds are distributed and necessary paperwork is signed to finalize the sale. The term “closing costs” is quite literal, implying that these fees are payable at the time of the property’s closing - the concluding phase when you transfer the home’s keys to its new owner. Sources: The Mortgage Reports and My Mortgage Insider Here’s a breakdown of some of the typical closing costs for buyers: Types of closing fees This practice referred to as seller concessions, can help make a home more attractive to potential buyers. However, the exact amount each party pays is often part of the negotiations, and it’s common practice for the seller to offer a credit for some or all of the buyer’s closing costs. Now, let’s delve into a detailed list of standard closing costs that sellers should anticipate: Types of closing feesĭata sources: The Mortgage Reports and My Mortgage InsiderĪlthough both homebuyers and sellers pay closing costs, the buyer is usually the party responsible for the bulk of the closing fees in a real estate sale.
This means that as a seller, you’re essentially compensating both your agent and the buyer’s representative. This commission is usually divided equally between the buyer’s and seller’s agents. For instance, for a home sold at $400,000, a 5% commission translates to $20,000.
However, recent trends suggest a decline, with commissions now leaning towards 5%. Historically, these commissions have hovered around 6% of the property’s sale price. Commissions are predominantly borne by the seller. While both are settled at the closing of the sale, they serve different purposes. It’s essential to differentiate between closing costs and real estate commissions, even though they might sometimes be mentioned together.
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