A Detailed Guide About Closing Costs for Sellers and Buyers

A Detailed Guide About Closing Costs for Sellers and Buyers

Are you planning to buy a house in Corpus Christi but confused about the closing cost? Here is everything you must know.

Sell your house for cash or buying a house, the closing cost is an important part of real estate dealings. Closing costs are the extra fees or settlement fees buyers and sellers need to pay to close the deal. Closing costs can become a sticker shock if you fail to calculate them at the beginning itself. The prior calculation will help you find out the exact amount that will be deducted from you after the deal.

Closing costs are usually paid based on the agreement made by sellers and buyers. Usually, buyers need to pay a larger portion of the closing cost compared to sellers. It can range from 2-5% of the total purchase cost. 

Read More: Buyer’s Market Vs. Seller’s Market: Which Is It?

What Are Included in the Closing Costs?

Every seller approaches the real estate representative with a single motive: “sell my house for cash”. But they neglect closing costs and end up in chaos.  Understanding your mortgage closing cost and making a rough estimate is crucial for sellers to finalize the price and buyers to prepare the amount. An unprecedented closing expense can delay the whole transfer and proceeding. A lot of things are included in the closing cost. Let’s flip through some of the common fees both buyer and seller should be aware of

1. Agent Commission

Agent Commison

3% of the total purchase cost needs to be spent on realtors who act as a mediator in your entire sales process. When a home is sold, both the buyer’s agent and the seller’s agent are eligible to get a commission. Usually, sellers pay the commission to their agents. Then the agent from the sellers’ side divides it with the buyers’ agents. This is the usual norm. It doesn’t mean that the seller needs to pay the whole amount. The seller may roll the realtors’ fees into the price of the house to offset the closing cost paid to agents.

2. Title Fee

Title Fees

Title fees usually consume 2-5% of the total fees. But what exactly is the title fee? Title fees are paid to ensure the owner has maximum rights to the property. In real estate, the title of a property refers to the legal right the seller must have to deal with the property. With title fees, you can occupy, develop, lease, sell, or transfer the property to another. Title insurance also saves homebuyers and mortgage lenders from future defects, hidden taxes, or unverified sales. 

There could be worse scenarios, like the seller might have brought the property through an illegal closure, or the property has multiple owners who do not agree with the sale. So, it is necessary to verify the property title to ensure it is not involved in any legal dispute.

Some of the title fees included in the title Closing costs are:

  • Title Search Fees  

Title Search Fees

The title search company will search public records to make sure the property is not having any ownership issues, and the seller is the verified owner of the house. Paying the title search company will help you confirm the property value and verify ownership rights.  

  • Mortgage Insurance

Mortgage Insurance

If the buyer requires a loan amount to buy the property, the loan provider or lender needs a lender’s title insurance to protect the investment until the loan is paid completely. In this way, you can protect your lenders in case of a discrepancy in the title claim.

  • Homeowner’s Title Insurance 

Home owner’s title insurance protects the buyer from forgery, undisclosed heirs, and errors in the property title. It’s a one-time fee that provides lifetime security for your investment. If a dispute or tile issue occurs in the future, the insurance company will help you monetarily and legally.

  • Government filing fees & Notary Fees

For officially becoming the legal owner of the house, you will need to file your property and loan information with the court. Government filing fees are the expense charged by the officials for registering the sale. Official documentation gives you legal protection to own a property and use it for commercial purposes. Some of the expenses included in the Government filing fees include- affidavits, leases, mortgages, corner certificates, uniform commercial code filings, changes of title, deeds, registration of trade names, boundary surveys, powers of attorney, etc.

Moreover, the notarization of the mortgage is also a crucial process that comes under the title closing cost. Notarization ensures that the documents submitted are authentic. Usually, it costs around $10.

3. Attorney Fees

Attorney Fees

Attorney fees usually cost 2-4% of the total purchase. Both buyers and sellers will have attorney support to review all the closing documents. The role of an attorney is crucial while closing the deal. The attorney helps frame settlement statements, loan documentation, promissory notes, and other documents as required by law.

4. Property Tax

Property Tax

Six months of advance tax needs to be paid at the closing of the property deal. Usually, both seller and buyer need to pay the property tax according to the language of the contract. Buyer and seller can divide the tax amount to be levied depending upon the nature of possession. It can be equally divided, or else the owner can pay the amount up to the day they possess the property.      

The list doesn’t end here, there are other miscellaneous fees that can pop up at closing-courier fee, pest inspection fee, appraisal fee, application fee, etc. Buyers and sellers need to stay prepared to meet these expenses amicably and make the entire process hassle-free. A well-defined contract will help you define and decide on how to approach closing costs.          

Calculate your Closing Costs to Sell & Buy a House Fast 

Are you worried about the closing cost? We know that you want to sell your house fast for cash. Well, then you are in the right place. We, The Grahambelle Group, buy houses for cash without any commission or closing costs. Yes! You heard it right. Now you don’t need to worry about a gazillion of fees and negotiations. We buy houses in Corpus Christi to help you quickly sell houses for cash. From home inspection to closing the deal, our expert professionals will take care of the proceedings. So, leave your worries and get in touch with us. We are ready to help you anytime.