What’s Included in Closing Costs?

Q: What are closing costs? Do they include the Realtor’s Fee? And who pays the Realtor’s fee? –Robin

A: Closing costs if there is a lender involved are all the charges that the lender tacks on to give you a loan – they total about 3.5 percent of your loan amount. The realtor fees are Always paid by the seller so they are not called closing costs . The attorney or title company, document prep fees, escrow amounts for taxes and insurance and recording fees and wire transfer fees are examples of closing costs – but in any real estate contract – the closing costs are spelled out – (In Georgia on the first page) and so its easy to understand. I am not licensed in CA so I’m assuming there are some differences – the short answer is that the realtor’s fee are NOT included in Closing Costs and the seller pays them – unless the buyer has agreed to do so …like in the case of a ‘for sale by owner’ transaction. I hope this helps.

Leah Layman is a Realtor with Keller Williams Realty-Augusta Partners in Augusta, GA.

A: Closing costs are fees charged by title companies, banks, lenders, etc. that are associated with the purchase of a home. These fees typically range from 2 1/2 – 4% of the selling price of the property. Items such as loan origination fees, discount points, appraisal, survey, underwriting fees, title search fees, title insurance. It is a good idea to get an estimate of closing costs from 2 or 3 lenders so you have a good idea of costs prior to making an offer. Don’t forget that you can ask the Seller to pays these costs or negotiate a higher interest rate to have the lender charge less in fees or discount points. Realtor’s commissions appear on the settlement statement and can be paid by buyer or seller. The terms of who pays are outlined under a listing agreement on the property being sold. Have your Realtor explain who is expected to pay the commission in a transaction.

Julie Chapman is a Realtor with Chapman Realty in Brunswick, GA.

A: The seller pays the realtor’s fees and his/her own share of closing costs. The buyer pays closing costs and this ranges based on your loan amount (how much you are borrowing) and other fees. Best thing to do is to consult with a local lender who can give you a “good faith estimate” of lending fees and closing cost.

Maria Jeantet is a Realtor with Coldwell Banker C&C Properties in Redding, CA.

A: You could consider realtor fees (= commission) as part of closing costs. The best way is to talk to any local Title Company – ask them about closing costs. One cannot talk about closing costs without knowing if you are a buyer or seller. The biggest single closing cost will be commission – seller pays not buyer. But many closing costs will depend on the type of property; if land is included, land survey may have to take place. If septic tank is included, draining and inspecting will cost some money. There may be secondary inspection required – for example: home inspector may decide that roof is in marginal condition so roof inspection by a roofer may be needed. I hope this information is helpful.

George Szkup is a Realtor-Broker with Tucson Home Advisor in Tucson, AZ.

A: Typically the seller pays the Realtor fees both for the listing agent and for the buyers agent. When a seller lists a property in the MLS they are offering compensation to a buyers agent as part of the listing. Some buyer agents may require more than is being offered. This sometimes happens in foreclosures and short sales but it is rare.

Buyer closing costs will vary but they could include some or all the following: attorney fees, title search/insurance fees, mortgage application fees, mortgage origination fees, state/local transfer taxes, HOA set up fees, flood certification, home warranty, appraisal fees, mortgage insurance premium, home insurance premium, attorney fees, processing fees, and any pro-rated items like taxes, HOA dues, or utilities…

It is permissible to ask the seller to pay for some or all of your closing costs, but this will ultimately affect the final price you are able to negotiate. You must pay your own down-payment. The seller can not do this for you.

Read more: What’s Included in Closing Costs? | REALTOR.com® Blogs