When you buy or sell a home in Boca Raton, you’ll encounter closing costs – the fees associated with a real estate transaction. But what are they, and who pays them? This guide explains.
What Are Closing Costs in a Real Estate Transaction?
Closing costs are the fees associated with a real estate transaction. They typically range from 2 percent to 5 percent of the purchase price of the home, and can include things like:
- Mortgage application fee
- Home appraisal fee
- Credit report fee
- Home inspection fee
- Attorney fees
- Title insurance
- Real estate agent commissions
- Lender’s title insurance policy
- Settlement or escrow fee
- Notary fees
- Transfer taxes
Who Pays Closing Costs?
In a typical real estate transaction, the buyer and seller each pay their own closing costs. However, there are some situations where the seller may agree to pay some or all of the buyer’s closing costs. For example, in a tight housing market where there are more buyers than sellers, a seller may offer to pay the buyer’s closing costs as an incentive to get their home sold. If this is something that you’re interested in, or that the other party has asked you to do, you should talk to your real estate agent about the financial costs of doing so. Your agent can let you know how much you can expect to spend and whether paying the other party’s closing costs is a sound decision in your case or what is the usual and customary way in the county you’re buying in.
Related: Check out the pet-friendly, 55+ community of Emerald Pointe in Delray Beach
How Can You Save Money on Your Closing Costs?
If you’re a buyer, there are a few ways you can try to save money on your closing costs. First, you can ask the seller to pay them for you. As we mentioned above, in a tight housing market, sellers may be more likely to agree to this. You can also shop around for a mortgage lender with lower fees. And finally, you can try to negotiate with the various service providers to get a lower rate.
When Will You Pay Your Closing Costs for Your Real Estate Transaction?
Closing costs are typically paid at closing, which is the final step in a real estate transaction. At closing, all of the paperwork for the sale will be signed, and the buyer will hand over their down payment and any other agreed-upon funds to the seller. The seller will then hand over the keys to the property to the buyer. Once all of this is done, the transaction is complete.
Related: How to help your dog adjust to your new home in Florida
Other Fees You May Have to Pay in a Real Estate Transaction
Depending on whether you’re the buyer or the seller, there may be other fees you have to pay associated with your real estate transaction. For example, sellers may have to pay for repairs or upgrades, or to cover the payoff amount on their current mortgage loan; buyers have to pay for inspections (including special inspections that their lender requires) unless they’re able to negotiate to get a seller to cover them.
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