A Visual Guide to Closing Costs

Closing costs run between 2-5% of the price of the home you’re buying so they can add a considerable amount to what you pay for your home, particularly if you don’t factor them into your budget. But they’re also largely negotiable between the homebuyer and the seller. In some markets, the seller may even pay the entire amount of closing costs. However, this generally isn’t the case and most buyers and sellers split the closing costs, although not evenly.

The chart below will help you understand what portion of the closing costs belong to which party traditionally. It also helps you save money by understanding which closing costs are fixed and which can be “shopped” around.

Know that if you’re paying cash for a property, there are still home-buying closing costs but they will be less than if you are financing it.

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Buying a new home? Get a better understanding of closing costs with our free guide.

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Buyer’s Closing Costs

While any of these could be negotiated with the seller, these charges generally fall on the buyer(s):

• Loan origination fee
• Credit report fee
• Recording fee
• Underwriter fee for assessing your creditworthiness
• Taxes and escrow fees
• Earnest money (put down at time of offer)
• Appraisal fee to make sure the home is worth what they’re asking
• Title search to make sure there aren’t any encumbrances in ownership
• Survey fee to check property lines (not applicable to condos)
• Mailing and courier fees for paperwork
• Loan discount points

Buyer’s Negotiable Costs – these are costs that the buyer can shop around

• Title insurance (lender policy is mandatory if there is a lender, buyer policy is optional but highly suggested)
• Homeowner’s insurance
• Home and/or pest inspection (optional but advised)

Seller’s Closing Costs

Sellers have fewer costs at closing but they often pay more due to payouts and commissions. What they’re traditionally charged with is:

• Real estate agent(s)’ commission
• Loan payoff, if applicable
• Closing fee paid to the title company or the attorney involved with closing
• Taxes on the home sale
• Estoppel fees that are connected to the homeowners’ association or condo association (as applicable)
• Title transfer and recording fee

At least three days before closing buyers receive a closing disclosure. (Sellers will also receive one illustrating their fees and costs.) It is essential those numbers are reviewed and compared with the original numbers provided when funding was secured. If there are any discrepancies, notify your real estate agent or closing professional immediately.

Closing costs vary from state to state. Different states have different legal requirements when it comes to home sales and costs of home insurance vary, which can also affect closing costs. View a closing cost list of the least expensive and most expensive states.

Disclaimer: This information only applies to conventional loans and not government loans. VA and FHA loads change the allowable buyer costs by regulation.

There’s a lot to understand with closing costs. If you’re in the market for a home, download our free ebook — Homebuyer’s Guide to Understanding Closing Costs. It covers essential topics like what are closing costs, who pays what, what’s negotiable, and how do you pay them, in more detail.

An educated homebuyer is our favorite kind at Bay National Title Company. We strive to make sure our clients are clear on what’s required and what they can expect. If you want to work with a title company that places customers first, call BNTC today.