Buying a property is expensive. Not only is there the mortgage, but also insurance, taxes, maintenance, and closing costs. While closing on a home can be exciting, it comes with some fees. Closing costs are part of all real estate transactions. They encompass various costs, such as attorney fees, property appraisals, and mortgage fees.
Closing costs are paid by both the buyer and the seller. So, how much can you expect to fork over once the house closes? You can usually expect to pay 2% to 5% of a home’s purchase price. Depending on the price of the home, this can be a large amount. For example, for a $400,000 home, this can amount from $8,000 to around $20,000.
Closing costs are often a fixed amount, but in some cases, they can be negotiable, especially in a buyer’s market. Many buyers have the sellers pay various closing costs. The actual costs will vary, depending on state laws. You will be given a HUD-1 settlement form several days before closing. This form itemizes the closing costs, so review this document carefully to ensure there are no discrepancies.
Closing costs for buyers include:
- Loan fees paid to the mortgage company for originating the loan. These may include origination fees, appraisal fees, and credit report fees. The average cost of an appraisal for a single-family home is $349.
- Title fees. Title-related fees can include a title search, title settlement, and recording expenses. These costs depend on the price of the house and its location. Costs can range from a few hundred dollars to a few thousand dollars at closing.
- Pre-payments for homeowners insurance and property taxes. Make sure to have enough money to cover two months’ worth of these costs.
- Any homeowners association (HOA) fees
The sellers do not have as many fees to pay, but they typically pay more due to commissions and taxes. They may pay as much as 10% of the sale price. They pay real estate commissions and title transfer fees. They also must pay real estate agent fees, which are as much as 6% of the selling price of the home. Any unpaid utility bills and liens on the home must be settled before closing.
The seller in South Carolina typically pays the transfer taxes or deed stamps, which are $3.70 per thousand dollars of the contract price. So a $100,000 home would be $370.
In any case, keep in mind that closing costs are separate from your down payment. As a buyer, make sure you have the necessary funds available on closing day.
Contact a South Carolina Real Estate Attorney Today
Closing costs are just some of the fees that come with purchasing a home. Make sure you understand what to expect because the costs can add up quickly.
There’s a lot that goes on when a home closes. A South Carolina real estate attorney from Blackacre Law, LLC can assist you in many ways, from researching the title history of the property to preparing all documents required for the transaction to working with lenders and real estate agents on your behalf. Schedule a consultation today by calling (864) 775-5400.