Thread: Watch Out for Those Closing Costs

Great points indeed here Kimberly.

As a buyer and seller in today's real estate market, it is crucial to know exactly what fees you have and what you are paying for.

In Minnesota, our team really focuses on educating all of our buyers and sellers. Whether they are looking to buy a home, condo, townhome, any type of MLS listing: we are there to educate as their real estate broker.

Thank you again.

Most of the clients who think about buying a home only think about the down payment as the primary expense. IT IS NOT. Don't full yourself. Closing costs in some cities can go as high as 4% plus the legal fees, moving etc.

If you area buying a 500,000 home in Toronto Ontario you will pay the following for closing cost.

1. Home Inspection 250 - 300 dollars
2. 4% Land Transfer Tax 20,0000 dollars
3. Legal Fees 700 - 1500 dollars

If you only put a 5% down payment which is 25,000 you have another 22,000 in closing costs that's almost as much as the down payment.

Make sure you are aware of all the costs before signing an offer to purchase.

Best of Luck.

This is where a good Realtor is worth his/her weight in gold...they can decipher the documentation and tell you what to expect in the way of out-of-pocket costs. There should be no surprises that the closing.

This is a good thread thus far! It is also important to keep in mind the type of financing the buyer will be using. For example, if they will be using a FHA loan, then anticipate the closing costs to be higher than that of a conventional loan. It is always recommended for the real estate agent to work closely with the loan officer to ensure the closing costs do not catch anyone by surprise!

These are all good points to keep in mind. I would only add that both the buyer and seller can ask the title company for a preliminary settlement statement that should include everything in the TC's file up to that point. Sometimes, they will only show one side to the respective parties but you can request both.

Originally Posted by John_in_NY

Buyers often over look, or perhaps optimistically underestimate real estate closing costs. With
all the negotiating on the home price and endless hours searching for the lowest mortgage rate, the
closing costs tend to often get lost in the shadows. Here is a list of some of the more significant closing
costs that buyers should keep on their radar:

1. Mortgage Discount "Points": If you do not anticipate staying in the home more than a few years, consider a zero point loan. It will

only
cost a few dollars more a month and will eliminate having to put thousands out up front.

2. Home Inspection fees: a home inspection is important, but shop around. With a slow market, home inspectors
are also eager for business and you may be able to find a better deal than your first pick.

3. Escrow and Title fees: these fees may be negotiable. Work with your real estate broker and the Escrow and Title company. Do not
be afraid to negotiate, especially in this market.

4. PMI (Private Mortgage Insurance): this can be avoided if the buyer puts 20% down, potentially saving thousands of dollars.

5. Appraisal fees: these can be financed with the property or find a mortgage company that does not charge up front appraisal fees.

When purchasing a home, it only makes sense to test the indoor air quality. On top of your standard inspection, it is important to have a mold test / mold inspection performed by a professional. The time to find out the home has high levels of mold is not after signing on the dotted line. Mold can act as a trigger for a litany of medical ailments. Why put your family in harms way?

Originally Posted by John_in_NY

Buyers often over look, or perhaps optimistically underestimate real estate closing costs. With
all the negotiating on the home price and endless hours searching for the lowest mortgage rate, the
closing costs tend to often get lost in the shadows. Here is a list of some of the more significant closing
costs that buyers should keep on their radar:

1. Mortgage Discount "Points": If you do not anticipate staying in the home more than a few years, consider a zero point loan. It will

only
cost a few dollars more a month and will eliminate having to put thousands out up front.

2. Home Inspection fees: a home inspection is important, but shop around. With a slow market, home inspectors
are also eager for business and you may be able to find a better deal than your first pick.

3. Escrow and Title fees: these fees may be negotiable. Work with your real estate broker and the Escrow and Title company. Do not
be afraid to negotiate, especially in this market.

4. PMI (Private Mortgage Insurance): this can be avoided if the buyer puts 20% down, potentially saving thousands of dollars.

5. Appraisal fees: these can be financed with the property or find a mortgage company that does not charge up front appraisal fees.

You have rightly pointed out the costs associated at closing of the transaction related to house purchase.Most of customers don't know about these costs and therefore disappointed at the end of transaction. The finance shortage issues often confronted as these closing costs arise at the end.