Buyer Closing Costs

These are the closing costs buyers need to be aware of when purchasing.

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As a buyer, closing costs are a part of doing business when closing a transaction. Here are six such fees to prepare for when buying a home:

1. Title fees. Here in California, title representatives will conduct a background check to ensure the property is clear of any liens or other encumbrances, so they’ll have their own fees. How much this will cost you depends on the price of your home, but if you’re getting a loan for, say, $465,000, it will be in the neighborhood of $1,400.

2. Escrow fees. If you buy in California, escrow companies will cover all the documentation and act as middlemen between you and the seller. Typically, they account for 1% of the purchase price. These fees can include notary fees, so if you’re able to go to your agent’s office to sign any paperwork, you can reduce the cost of this fee.

3. Home inspection fees. You don’t have to order any inspections, but it’s highly recommended that you do. A general home inspection costs anywhere between $400 and $600—depending on whether the property is a condo or house. 

There are six fees to prepare for when buying a home.

4. Lender fees. The exact cost for this fee depends on which loan you apply for—FHA, conventional, jumbo, etc. Talk to your lender and ask for a quick overview of the fees they’ll charge to get a good idea.

5. HOA fees. If the property is in an HOA neighborhood, you’ll have to pay the HOA transfer fee.

6. Property taxes. Real estate taxes are prorated at closing, depending on the day and month of your purchase.

On the seller side, these fees can be provided by your agent. You can also ask the escrow company to provide a detailed net sheet of each estimated cost before listing your home.

As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’m here to help.