Many times, I get asked, "what other costs do I have when I buy a home?". Most people understand that they have to get a mortgage and they are going to need to put a certain percentage down, but what are all of the other costs they might get hit with?
First of all, every real estate transaction is different and the amount required at closing can differ by a wide range. Don't get totally freaked out by the different amounts. Many of these represent ranges, and some are optional, so this can be viewed in its entirety as an "all cases scenario".
If you are applying for a loan, your lending officer/mortgage broker should be able to furnish you with a pretty good estimate.
Over time, I have put the accompanying chart together to give everyone an idea of where to start. If you are paying cash for the home, you can see from the "Cash Transaction" column that there are a lot of costs that come off the table, and the transaction gets a lot simpler.
Also, you will notice that there are costs traditionally associated with the buyer and traditionally associated with the seller.
I say traditionally, because many components of the transaction are negotiable.
At the closing table, everyone that hasn't already been paid gets paid!
The title company gets paid for making sure the property is transferred cleanly.
Recording fees are covered. Credit reports are covered.
The seller pays the buyer for the days in a taxable year they have occupied their property. The buyer will be responsible for paying all of the taxes for that year when annual taxes are due.
The buyers insurance company gets paid to begin insuring the property from the second the buyer moves in.
Appraisals and Surveys get reimbursed.
Inspectors are usually paid before closing at the time of inspection.
If a home warranty is set up for the property, that amount is paid.
Fees required by the lender who loans the money to purchase the property are covered.
The government certainly gets paid their taxes on the transaction.
And finally, the agent for the buyer and his brokerage and the agent for the seller and his brokerage are paid for their work in buying and selling the property.