Today, we’re going to talk about closing costs. What are they, and who pays them?
Closing costs are fees that are associated with the closing of the transaction. That’s when the title of the property is transferred from the seller to the buyer. Closing costs are incurred by either the buyer or the seller or, sometimes, both.
Typically, home buyers will pay between 2% and 5% of the purchase price of the home in closing fees. These fees include wiring fees, hazard insurance, and priming your escrow account for property taxes, title insurance, appraisal, underwriting, and processing fees. “In today’s market, sellers aren’t paying closing costs.” The Wasatch Front market is hot right now, and buyers who try to make the seller pay for closing costs are losing out. There are a lot of multiple offer situations, and buyers are offering to cover closing costs in order to get the home.
One way to position yourself to win in a multiple offer situation is to get a premium priced loan. The lender bumps up the interest rate by 0.25% or 0.50%. Then, the lender pays the closing costs, so you don’t have to pay money out of your own pocket; your offer then appears stronger to the seller.
If you have any questions, give me a call or send me an email. I would be happy to help you!