I've seen where some estimate closing costs as 3% of purchase price. I bought a $200k house and it was in this ballpark.
I was looking at a $50k foreclosure, and wondering if this rule of thumb applies to homes in this price range.
EG, I have no idea if my state/local document stamps are variable or fixed (FL).
A lot of closing costs include the cost of loan origination fees and title insurance. If you buy a foreclosure usually you must buy your own title insurance which can run up costs a bit. My normal closing costs are 1% loan origination fee, mortgage title insurance, prorating of taxes, and that's it for big ticket items. I am now where near 3% on closing costs. You might shop around more.
"Closing costs" as you say, can include a lot of variables. For financed sales, you've got 15 mo.s of property taxes and insurance, and mortgage recording fee of 0.35% of the mtg., along with actual lender/loan fees and points. Otherwise, doc stamps are 0.7% of the sales price, title insurance 0.55%, plus $4-600 in settlement fee, title/city lien search, recording, misc. fees.
Doc stamps, title insurance and estoppel fees are typically the seller's expense (in Broward typically the buyer pays title insurance).
So it does sound like the costs increase in % terms when the purchase price goes down, as if there are any fixed costs then those will rise.
Are there any costs that are higher in % terms for more expensive properties? That would surprise me, but it's possible...
Thank you for your input.
I had to use this title company as a condition of the sale.
I paid $1,500 just for title services, which seems high. I also paid for doc stamps and title insurance.
I'll be shopping around before I make another purchase, and will also be negotiating better terms for myself.
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