Closing costs in a wholesale transaction

[Ben M.]

What all are common items included in closing costs on a wholesale transaction? Which items are usually the seller's closing costs and which items are the buyers even though in most cases the buyer pays both closing costs...?

There would usually be no realtor commissions to pay on both ends is that right?

[Erik Estrada]

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

[Ben M.]

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

[Erik Estrada]

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

[Ben M.]

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

I didn’t draft a purchase contract. I believe the lender will coordinate all of that and get a title and escrow company

[Erik Estrada]

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

I didn’t draft a purchase contract. I believe the lender will coordinate all of that and get a title and escrow company

 Got it. And your lender didn't provide you with a closing cost estimate? Are they using an appraisal? 

[Ben M.]

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

I didn’t draft a purchase contract. I believe the lender will coordinate all of that and get a title and escrow company

 Got it. And your lender didn't provide you with a closing cost estimate? Are they using an appraisal? 

Nope I’m just wondering what the common items are for closing costs and which one’s for the buyer and which one’s for the seller 

[Erik Estrada]

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

I didn’t draft a purchase contract. I believe the lender will coordinate all of that and get a title and escrow company

 Got it. And your lender didn't provide you with a closing cost estimate? Are they using an appraisal? 

Nope I’m just wondering what the common items are for closing costs and which one’s for the buyer and which one’s for the seller 

 Seller wouldn't have fees to pay. You would be responsible for the cost which could include Title and Escrow Fees, Lender points, appraisal (if any). If I were in your shoes I would request a fee estimate from your lender  

[Ben M.]

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Quote from @Ben M.:

Quote from @Erik Estrada:

Hey Ben,

Are you working with a lender or are you planning to buy all cash? 

 Hi Erik! I am using a hard money lender

 Also since you aren't using a realtor, did you draft a purchase contract yourself? Are you using a title and escrow company? 

I didn’t draft a purchase contract. I believe the lender will coordinate all of that and get a title and escrow company

 Got it. And your lender didn't provide you with a closing cost estimate? Are they using an appraisal? 

Nope I’m just wondering what the common items are for closing costs and which one’s for the buyer and which one’s for the seller 

 Seller wouldn't have fees to pay. You would be responsible for the cost which could include Title and Escrow Fees, Lender points, appraisal (if any). If I were in your shoes I would request a fee estimate from your lender  

 Awesome! Thank you Erik!

[Eliott Elias]

Depends on if you double close or assign it. If you double close you should put all closing costs to the assignee. If you assign it's whatever the contract states 

[Jesse LeBlanc]

@Ben M. you said you're using a hard money lender on a wholesale deal.  Are you stating that you plan on being the end buyer for a rehab and either flipping the property or later going to refi on the property from your Hard Money Lender?

Since you stated it's a wholesale deal and using a HML, i'm assuming that you aren't the wholesaler and trying to double close, correct? If so, you'd be looking at using a different loan type for that.

Assuming you're the end buyer, then the fees depend on how you and your wholesaler worked it out.  If the wholesaler is assigning his contract to you, then GENERALLY you are paying for all closing costs and depending on the state you'd be paying for all the property taxes or prorated taxes UNLESS something in the contract stated otherwise (rare).

If you're the end buyer and the wholesaler is looking to close GENERALLY they will pay for their closing costs with them as the buyer when they were direct with the seller, and then you'd pay your closing costs when buying it from the wholesaler "same" day.  

Your closing costs usually include Title insurance, possibly lenders title insurance if your HML requires it, you'll pay their points/origination fee, prorated interest for the month possibly appraisal fees or other fees your specific HML require and sometimes the appraisal is paid out of pocket ahead of time. 

Reference to the realtor commission, then only if there was a realtor involved and what they worked out with whomever they were representing.  If a seller had a listed property, they GENERALLY are paying for the commission of their realtor and the buyers agent commission (if the buyer was represented as well).  If you didn't have a buyer agent on a listed property, then its possible the entire commission could go to the listing/selling agent or maybe only have and usually the seller pays for that.  BUT if anytime the buyer is on the hook for something, it would be in the contract.

Review your contract, know what you're paying for to make your final decision.

[Nate Sanow]

Sellers pay their property taxes, and any liens or judgements - unless other wise negotiated.  

Buyers pay title company closing costs, unless other wise negotiated.  

In fact, there is no rule really on who pays what, it just has to be paid.  The contract / purchase agreement should tell you, and it is probably you who should be / will be filling that out and deciding.  

Really your question would be, what are all the possible closing costs and there is a long list there, I suggest getting to know a local closing company to help you and they should have some info on a website.