Closing Costs – What Are They, and Why Do They Matter?

Posted on | November 9, 2018

Being a first-time buyer includes a lot of firsts: first time working with a realtor, first time researching what liens are, first time deciding if you really want marble countertops or if the blue paint on the door is something you can to live with.

And paired along with your firsts: confusion. With Alliance Title’s Buyer / Seller Guide, we can aid you through this exciting and (somewhat) complicated process. So, let’s go through the “What,” “Who,” and “When” of closing costs.

What

Other than the down payment and cost of the property, closing costs are additional fees that need to be paid at the time of closing.

This may involve:

Escrow fees, title insurance premiums, tax prorations, loan fees, deed recording fees, real estate commissions, and more.

Who

There are many differences that can play out between a buyer and seller when it comes to closing costs. What’s listed below is “standard,” but it’s important to understand that this might not always look the same for each party in each transaction.

The buyer pays for: The seller pays for:
The lender’s title policy premiums Owner’s title insurance premiums
Escrow fees Escrow fees
Recording charges for all documents in buyer’s name Real estate commission
Tax proration Document recording and release fee for deed
HOA prorates and transfer fees Any loan fees required by buyer’s lender
All new loan charges Payoff of all loans in seller’s name or against the property
Fire premium insurance for the first year Interest accrued by lender being paid off, statement fees, etc.
Any judgements, tax liens, etc. against the seller
Any and all delinquent taxes

When

You’ve signed the papers! Time to move in, right?

Well…not yet, exactly. Most buyers anticipate receiving their keys the day of closing; however, this usually doesn’t happen until a day, or a few days, after signing.

The transaction does not ‘close’ until all the funds have been cleared and provided to the title company, and the deed to transfer title is recorded at the county courthouse.

 

So – there you have it! While this process might be a bit hectic, it’s important to feel confident in your transaction and to have a great team behind you.

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