Real Estate Closing Costs: What to Expect for Home Buyers
Real estate closing costs are definitely an expense to be prepared for when it comes to buying a home! There are different types of closing costs, each associated with a different aspect of the home buying process. Keep in mind, it can vary between states and each individual transaction, but from my experience, here’s a general overview of what to expect for closing costs (not including the down payment!).
Types of Real Estate Closing Costs (for Buyers)
Appraisal
Typically costs $300-450
An appraisal is done by a licensed appraiser to confirm the value of the home you’re looking at buying. This is done if you’re buying with a mortgage, and is completed during the escrow process.
Home Inspection
Typically costs $400-600+ (depending on the size of the home)
You don’t have to get a home inspection (some buyers don’t especially in competitive markets), but if you do, this is another step in the escrow process and is done to inspect the condition of the home and check for repairs that need to be done before closing.
Title Search
Typically costs $75-$200
A title search isn’t always done, but if it is, it’s generally a smaller fee involved in the home buying process. This is done by the title company to make there aren’t any issues with the property (such as missing information, unpaid real estate taxes, incorrect names on the deeds, etc.).
Title Insurance
Typically costs $500-$1,000+
Title insurance is generally required by your lender. It essentially protects you (and your lender) by insuring your claim to the home’s title and digs into any legal issues that might exist with the current title.
Mortgage Application Fee
Typically costs $200+
Some mortgage lenders charge a fee to process your mortgage application, which can start from a few hundred dollars and up.
Mortgage Origination Fee
Typically costs 0.5%-1% of the loan amount
Some lenders also charge an origination fee for starting the loan process. This fee can also be charged as a flat fee or as a percentage of your loan.
Because each transaction is different and costs can vary between cities and states, these are just some of the common types of real estate closing costs for buyers to expect.
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