Misconceptions about closing costs:
- Closing costs are listed on the purchase agreements.
- Buyers and sellers negotiate/divide up who will pay what costs from an established list of standard charges.
- Buyers pay all closing costs
- Sellers pay all closing costs
- Closing costs are standardized, or one lump sum
- The seller needs to bring a bunch of checks to closing and pay each closing cost vendor indvidually
For seller closing costs, here are some important points to remember:
- These same, exact costs are paid by sellers whether they sell with a huge commission traditional agent or without any professional assistance or MLS listing.
- Seller closing costs typically involve the costs to prepare their ownership documents for transfer, these costs are paid to a closing company or attorney. They are never paid to our brokerage.
- There are generally multiple governmental fees and taxes to transfer property.
- These fees are not to be confused with the buyer closing costs, which are generally much higher because they involve substantial costs related to getting a mortgage (appraisal, title insurance, loan application, mortgage origination, etc.).
- There are governmental recording fees paid at closing by the seller for recording the deed and satisfaction of existing mortgage(s) after the transaction is complete.
- Local custom can cause some variation-in a few areas, if you move from one county to the next, the custom/tradition becomes that the seller pays for the Owner's title insurance, or a particular fee is split 50/50 between buyer and seller.
- The best way to get the most accurate estimate of your expected closing costs is to contact a local title company, tell them you are a seller, answer their questions and receive an estimate. Some now have website cost estimators as well.
- The typical closing/escrow/settlement involves the seller signing a settlement statement (among other documents) that shows all the different closing costs, deducted from the sales price, and the mortgage balance payoff, and receiving one check/wire of the net proceeds.
<span">Closing costs vary greatly depending on the area and how many governmental fees are charge.