You’ve likely heard about closing costs, but do you know everything that they include? Buying and selling a home is usually the largest transaction anyone will make in a lifetime. Check out our closing cost “FAQ” for a breakdown of the different costs paid by home buyers and sellers to learn more about what closing costs are all about.
What Are Closing Costs Exactly in The Roanoke Valley?
Closing costs refer to all of the fees that must be paid at the closing table. Depending on where you live, the fees and costs can vary. But generally, closing costs include, but are not limited to:
For Home Buyers (Click Here for help with buying a home)
- Transfer Costs
- County Transfer Tax for the Deed
- County Transfer Tax for the Mortgage
- State Transfer Tax for the Deed
- State Transfer Tax for the Mortgage
- Appraisal Costs
- Home Inspection Fees
- Recording Fees
- Title Insurance
- Title Binder
- Underwriting Fees
- Lender Origination Fees
- Courier Fees
- Wire Transfer Fees
- Credit Report Fees
- Administrative Fees
- Attorney Fees
- Title Exam Fee
- Prepaid Interest
- Prepaid Hazard Insurance
- Prepaid Property Tax
For Home Sellers: (Click Here for help with selling a home)
- The balance of the mortgage or loans against the home
- Interest pro-ration on any current home loans
- Final utility bills
- Final homeowner association dues
- Final property taxes
- Any liens against the property
- Home inspection repairs
- Pest control treatment if evidence of termites
- Seller’s recording fee
- Attorney Deed preparation
- Home Warranty policy premium
- Closing Costs paid on behalf of Buyer
- Real Estate Company Commissions
Who’s Paying?
While the buyer will usually has to come up with a down payment in addition the their closing costs, it is important to note that the seller typically pays 100% of the real estate commissions. Negotiating the closing costs during the sale process is becoming increasingly popular. In an effort to lure in more buyers, the sellers are more frequently picking up the tab when it comes to the buyer’s closing costs.
Are Repairs Included?
This is another item that is negotiated between the buyer and the seller. If the home is in need of some obvious repairs, the seller will often take care of these before putting their home on the market. However, if an inspection shows additional repairs are needed, a buyer may make his offer contingent on repairs being made. A buyer and seller can work this out before going to closing.
Can A Buyer Avoid These Costs?
Yes, and it is pretty normal for buyers to ask for “seller concessions”. Seller concessions are the dollar amount negotiated between the buyer and seller to offset the buyer’s closing cost expense. It is the dollar amount the seller agrees to pay towards the buyer’s closing costs, points, and pre-paid items, and comes out of the proceeds of the sale at closing.
For example, a seller could offer to pay $3,000 toward a buyer’s closing costs to help that buyer get into the home. So if a buyer were having to come up with a $5,000 down payment, plus $5,000 in closing costs (a $10,000 total tab), they would only have to bring a total of $7,000 to the table . Overall, paying for these concessions is a small price to pay to get quality buyers who do not have lots of cash lying around! Typically a lender will allow the seller to pay up to 3% of the cost of the home on behalf of the buyer.
Can A Seller Avoid These Costs?
Yes! By either: A) refusing to pay buyer closing cost, or B) working with a direct cash buyer who will pick up all costs associated with the closing! A direct cash buyer will not charge you a commission, usually pays in cash, and will usually not pay market prices . Many times, direct cash buyers will offer to pick up all costs including all repairs and attorney’s fees, which will save sellers money and hassle at the closing table. Click here if you are interested in working with a direct cash buyer.