Closing costs

11 Replies

What is a reasonable estimate of closing costs on a property about $150k?

Your title company should give you a good faith estimate; title insurance, pro-rated taxes, transfer taxes, deed preparation, recording fees, notary fees, junk fees, if a mortgage is involved it will add to the expense. I am sure you are doing a title search and you are either using an attorney or title company, they should be able to give you an estimate within a couple of bucks. Hope I've helped.

@Barshay Graves I'm guessing that doesn't answer your question.

@John Moore Any chance you can be more specific?

I realize there are lots of variables to this but I think he was looking for an estimate in the form of actual #'s... because I have the same question. Can anyone offer #'s or at least a percentage range? My example/question is: If it's bought for $80k (all cash), rehabbed, and sold for $150k (buyer uses a mortgage), what would a safe estimate be?


I calculate 4% has a buy and hold investor who finances her properties. If it's cash it will be a whole lot less.

When we sold my parts I estimated 9.5%. 6% realtors and 3.5 as closing cost assistance. These numbers while not perfect came close and was a good guide.

@Barshay Graves

I will only speak about NJ. There are many variables in closing costs. That is one of the reasons lenders provide good faith estimates. I am very close to many professional people that are involved in closing costs (again only in NJ) and the fees can be all over the board. I truly believe getting the copies of the good faith estimates and go line by line and challenge the fees and you will find it amazing how an educated investor can suppress the costs. Last deal Estimate $5300. Final $1900 and that was paid by seller not I.


This was for a purchase of $180,000:

Home inspection -$535

Appraisal fee - $435

Origination fee - $899

Homeowners insurance(first year) - $809

1st quarter property taxes -$1,163

Initial escrow deposit -$1,365

Title insurance - $532

Legal fees - $700

Government recording charges -$470

There were a bunch of other miscellaneous little charges, but these were the most substantial. All in all, my total closing costs were $7,922.63. This was through Wells Fargo. This should give you a starting point for research. I'd be interested to hear from experienced investors which areas I could do better on.

TD Bank Closing Costs 1/16/2014 Philly, PA SFH

General Fees:
TD Origination Fee 843.15
Appraisal Fee 525
Credit Report 8.37
Customer Authentication Report .85 (cents)
Flood Determination 5
Tax Related Service Fee 58
Title Services and lender's title insurance 1470
Owner's Title Insurance 650
Government Recording Fees 715
Transfer Tax 600

Items Paid in Advance:Initial Escrow Deposit 239.18
Daily Interest 89.38
Homeowner's Insurance 75 (Hazard Insurance)

Total $5222.68

Please all (speaking about NJ only)... Title insurance and the ancillary fees that go along with it (searching, recording, copies and etc) are usually twice what they should be. In my opinion only. Esq's often double and triple these fees to take there cut and bill you for it . Shop title fees! Ohhh!!! Origination fees !!! R U Kidding me. They are making enough on my money. Plz if you are getting into REI develop a relationship with your Lender, Title company and Insurance broker it pays off in the long run. Home inspectors same thing. If they do Termite Radon and etc remember they make more on everything they do so negotiate. I do my own inspections. If there is something funky I reach into my bag of professionals and call them. Surveyors same thing If I meet them there and I drive metal stakes into ground I save more money (that is if my lender won't let me use the current owners survey). Last but not least Develop a strong relationship with a good R/E attorney they can save you millions so you have to do due diligence when hiring them as they are not all the same.

Thanks everybody for the details. Hopefully, I'll be able to post my info if and when this property we're considering works out.

@Account Closed - I'd love to hear exactly which items and how you challenged them regarding your closing costs savings.

@Scott Meyers ,

There are many ways to tackle these fees. I will share with you how I do it * "This is not advice". I am sure many others can offer their suggestions. 1- "EDUCATION" know the lingo. Read, visit podcasts and as many BP posts about closings and you will see all these different fees "via the banking/ lending world's own terminology creation" that people here are charged for in the loan process. I did not have these resources and I wish I did. You do so use them!

Find out what these terms mean and why you are being charged them and then you will begin to see you often can negotiate or "shop" directly at the providers of these needed sources. Eliminating the "middle woman/man". But again be educated. The sources hate amateurs, know the lingo. Do not be afraid to ask questions but again know terminology it really is not hard if you take your time.

PLEASE do not be intimidated. This is your hard/easy earned money we are talking about but at the same time the persons you are talking to need to make money so they can do what you are doing. Most people say Time = Money. Grandma always said "Those educated often control the greatest assets of all, time & money". I should have listened earlier...

Scott, I am going to jump around a bit because not every closing/deal is the same. Hence, there might be different fees involved so I am going to just start with the traditional loan/mortgage then go backwards to Lawyers fees. These items I am going to discuss is what I deal with in NJ. In other states there are other regulations and requirements so be aware of that. As you do more deals the process becomes so much easier as it is very redundant. That said do not become lazy. Some things are in place for a reason and some things you need to understand such as risk and reward.

Origination fees- UGHH OMG R u kidding me. You Ms./Mr banker/loan originator/loan officer/ "SALESPERSON" are going to charge me an additional fee to which I am already going to pay you a fee for when I borrow money from your company or source through the interest you charge me. I say NO WAY!

Simple solution "HAVE FUN" shop! Call every lender and mortgage company you can find on the internet/ in newspapers/ direct mail/your wond bank that lends and tell them what (in there language) you are seeking. EX. Jeff: Hi Sue from ABC mortgage company, this is Jeff how are you today? Sue: I am wonderful today and thank you for asking. how may I help you today? Jeff: I am seeking a loan to buy a home and I was wondering if I might ask you some questions and hopefully we can do some business together" SUE: Sure Jeff ask away but is this for a home you are purchasing to live in or are is this an investment property?.(you just got prequalified as a client with this question). Know if you are a first time home buyer she /he knows there is more hand holding. If you are a homeowner already and have been through the process before there is often less AND there are/might be different products and terms (more time needed for the bank to do due diligence/ more risk blah blah blah) between these types of loans which might be why they charge different rates. So again if you are already educated by BP you know this. Here is the trick/tip If you are educated the less hand holding and the easier (less time) the officer then the processor then the unwritting dept and so on needs to spend with you. If you can portray yourself as being educated and use the lingo they use you can ask for more in my opinion.

Jeff: Sue I see on the internet/direct mail advertisement you are offering a reduced rate for loan origination I was hoping I might eliminate them as I have been calling around and I was surprised some are. They say because I have good "credit score" over 740 (from educating myself and having a "currrent" copy of my credit report) I have a very low "debt to income ratio income" (from educating myself to know what that means) and I have a great job (last three pay periods of pay stubs and last 3 months of bank statements last two/three years of tax returns) and from what I have seen on the internet and been told by others I can afford a "total" mortgage payment of $1500.00 a month of course this includes taxes, mip, home owners insurance, HOA and such (again educating your self using online tools available at a host of places). What do you think? Can you do it or should I keep shopping? I see everyone's rates and they are very competitive (again through educating and observing the rates being charged on avg.on-line you have a good idea what they are) so I am just trying to eliminate those extra fees. Sue, I am sure you understand...

Even if he/she says she cannot reduce/eliminate the fees you can ask to speak to her/his supervisor or just move on to the next lender. BTW often the lender that says "no"! will often call back or send you in the mail or via the internet a piece that will allow you to "re-negotiate" remember they are in the business of lending money to qualified educated buyers like you.

lastly, another tip is to have a lender (mortgage company, bank, credit union) go through all the paperwork and have them send you a "GOOD FAITH" estimate it will have a list of "anticipated fees" both you will pay to the lender and you will pay out of pocket directly to another company in the process (appraiser, termite inspector and or etc) when you get this good faith estimate call and say the origination fee is unacceptable after all you are an educated buyer and hope to use your bank for additional deals surely you can get rid of these fees. Do not be afraid to seek other lenders IMHO you will find one that will negotiate with you and because of that they will remember you and you them. If your lender is good to you always refer your friends and associates to them and tell them to get educated as that will allow them to save money.

Disclaimer; This is not legal advice nor anything like that. You might want to consult a lawyer, pastor or your grandmother first. This is just from my personal experiences I am not a professional anything and I like It like that. I am just sharing that is all.

Next up. Some additional closing costs that can be reduced (again based upon my experiences only).

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