Who pays closing costs

In a real estate transaction, closing costs are typically paid by both the buyer and the seller, although the specific terms can vary depending on the terms negotiated in the purchase agreement and local customs. Here’s a breakdown of typical closing costs for both buyers and sellers:

Buyer’s closing costs may include:

1. Loan origination fees
2. Appraisal fees
3. Credit report fees
4. Home inspection fees
5. Title search and title insurance fees
6. Attorney fees
7. Escrow or closing agent fees
8. Property taxes
9. Homeowners insurance premiums
10. Prepaid interest
11. Recording fees
12. Mortgage insurance premiums (if applicable)
13. HOA transfer fees (if applicable)
14. Any other lender fees or charges

Seller’s closing costs may include:

1. Real estate agent commission
2. Attorney fees (if applicable)
3. Title search and title insurance fees
4. Transfer taxes or conveyance fees
5. Prorated property taxes
6. Any outstanding liens or judgments against the property
7. HOA dues or assessments (if applicable)
8. Seller concessions or credits to the buyer
9. Any required repairs or improvements negotiated in the purchase agreement
10. Any other fees or charges specified in the purchase agreement

It’s important for both buyers and sellers to review the purchase agreement carefully and understand their respective closing cost obligations. In some cases, buyers may negotiate with sellers to cover a portion or all of the closing costs as part of the purchase agreement, especially in competitive markets or when the seller is highly motivated to close the sale. Similarly, sellers may negotiate with buyers to reduce their closing costs or offer credits to offset some of the expenses associated with the transaction.