How to estimate closing costs?

11 Replies

What are all the costs I can expect on having during closing and how can I figure out normal prices or estimate what it might be?

I want to figure out a ballpark estimate of closing costs before I analyze properties so I can take closing costs into consideration ahead of time to see if its worth it to act on a property or not. How do you go about estimating and ultimately finding real closing costs?

Originally posted by @Tarcisio Mora :

For the most part closing costs are usually between 2-5 percent.

 How do you come up with that number? I thought that closing costs are usually flat fees associated with the loan, escrow, and title company?

Wouldn't that mean that a $40k house and a $500k house have substantially different closing cost percentage of the total price?

Or do lenders and title companies usually charge a percentage of the total purchase price?

@andy thoman, I was speaking in general terms and that's why I started with "for the most part" but I guess that if you are not looking at the median home prices and look at the top end and bottom end of the market, you are right. And that probably makes more sense to consider each deal on its own rather than overall in general. Sorry still learning

Generally speaking if it’s a residential single family I’ve seen 4-6k, all in including an appraisal and inspection. So far I’ve bought two houses that were almost double in value as one another and the closing costs were about the same.

Hey @Andy Thoman

Closing costs will differ quite a bit depending on the locale of the purchase and the type of financing used, among other variables. 

 A good title rep/escrow officer should be able to walk you through the different costs that are typically paid by the buyer in your market, which you can then use to develop your own rule of thumb.  

Closing costs vary significantly! I have had closings where I have been given money back ($2000 or so) due to the tax structure in the town. I have also had closings where it has cost a few thousand dollars. If you are only asking about the closing costs for the loan itself, banks can probably give you that. If you mean total, that will 100% depend on the house and where it is located.

Closing costs vary significantly by jurisdiction. They are also allocated between buyer and/or seller by contract. The cheaper the property, the higher the percentage will be because some fees are flat and charged regardless of purchase price. Also there are often title insurance minimum charges.

I agree with @Kevin Fox -- your best source for closing cost info is a local title company. Call with transaction details -- property type, purchase price, loan amount (if any), transfer/recordation tax split, etc.