June 1st, 2017 6:59 AM by Jackie A. Graves, President
Usually, the buyer faces more line-item expenses, but the seller
pays the commission.
does a buyer or seller show up to the closing without knowing exactly what
their costs of sale will be.
fact, based on the mortgage loan amount of the purchase/sale price, it’s not
hard to ballpark either side’s closing
costs. Before you get too far along in the process, ask
your real estate agent or mortgage professional for an
you have a real, live deal with a closing date, you should be able to know your
costs pretty close to the penny.
you’re new to real estate or haven’t bought or sold in a while, here’s what you
need to know about closing costs.
a closing, both buyers and sellers have costs. Usually, the buyer is faced with
more line-item expenses than the seller (although sellers pay more).
starters, most buyers are getting loans to make the purchase, and many of the
charges stem from the loan.
buyer should receive a loan estimate form early on in the sale
process. This document spells out all the approximate costs
the buyer will face when making the purchase, so there aren’t any surprises at
closing. Some buyers use the information on the loan estimate form to shop
for different lenders, interest rates and costs.
buyers getting a loan will see some of the following costs:
sure to go through these fees line by line with your mortgage professional to
understand exactly what they are and how they apply to your loan.
from the expenses of getting a loan or buying a home, some expenses, such as
property taxes or homeowners association dues, are pro-rated and paid at the
time of closing. For example, if you’re buying a home and you close toward
the end of the property tax period, you’ll likely need to pay the balance of
same holds true for prepaid loan interest. If you close toward the end of the
month, the lender may ask for the first month’s payment up front.
up with an extra one to two percent toward closing costs can be a bigger deal
than a $5,000 reduction in the purchase price, so ask the seller to pick
up some of the closing costs as a part of the negotiation.
for $5,000 to go toward closing costs will be a much greater bang for the
buyer’s buck. The price reduction won’t amount to much more than a few
dollars per month over the length of the home loan. But saving $5,000 at the
closing will be money right back in the buyer’s pocket.
sellers, there are always fewer line items on an estimated closing statement.
But the seller generally bears the biggest brunt of the fees: the real estate
commission is based on a percentage of the total sale price, so it tends to be
the biggest fee. In addition to the real estate commission, sellers may have to
pay the balance of their property taxes, if they haven’t done so already, as
well as any prorated homeowners association dues.
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