Tuesday, December 20, 2011

Getting a Handle on Closing Costs (Part 1)

This is the first of a series of articles about closing costs for Buyers and Sellers.  The next will be some actual dollar estimates designed to provide you with some better idea of what you can expect.

THE BUYER NORMALLY PAYS FOR:• One-half of the escrow fee (according to contract)
• Lender’s title policy premiums (ALTA)
• Document preparation (if applicable)
• Tax pro-ration (from date of acquisition)
• Recording charges for all documents in buyer’s names
• Fire insurance premium for first year
• Home Warranty (according to contract)
• Inspection fees (according to contract): roofing, property, geologial, termite, etc.
• All new loan charges (except those required by lender for seller to pay)
• Interim interest on new loan from date of funding to first payment date
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THE SELLER NORMALLY PAYS FOR:

• One-half of the escrow fee (according to contract)
• Work orders such as termite inspection and work (according to contract)
• Owner’s title insurance premiums
• Real estate commission
• Any judgments, tax liens, etc. against the seller
• Any unpaid Homeowner Association dues
• Home Warranty (according to contract)
• Any bonds or assessments (according to contract)
• Any loan fees required by buyer’s lender (according to contract)
• Recording charges to clear all documents of record against seller
• Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
• Interest accrued to lender being paid off, reconveyance fees and any prepayment penalties

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