High Closing Costs?

Question

Hi All,

I'm purchasing a couple of off-market properties in Pittsburgh PA and I was just sent these closing costs from my realtor. I'm purchasing this property for 44K along with another one for 56K. I'm also purchasing another place I found for 40K, all on the same blanket commercial loan through a lender referred to me by my realtor. I'm wondering if these costs look right? They seem high to me but I don't want to make false assumptions. Thanks for any help you can send my way!

Chantelle P. · Answer

@Kwame Darko

Well that's great! It's always nice when things come in better than estimated. Hoping the rest of the process went well!

Kwame Darko · Answer

@Chantelle P. I ended up talking to my attorney handling the closing and I was told that most of those estimations on the itemized list the lender provided were just formality items. In actually, I would only have to pay half of those cost which knocked it down to 6% of the total loan rather than 11%.

Chantelle P. · Answer

@Kwame Darko Well I'm still in process with closing on this one and still working with the lender to try and get them down. I did just close on another property and noticed that my agent's broker charged a junk admin fee of 295-. Origination and broker fees are the same thing so don't pay those twice! Good luck to you. Were you able to get your costs down at all? I payed 11% fees also, which just seems so high...I'm hearing between 5-7% is pretty standard.

Kwame Darko · Answer

@Chantelle P. did you ever find out what the deal was with the closing cost? I have  similar situation with 8k on a 71k property. That’s about 11% where as everyone on here says at most they paid 5%.

Troy B. · Answer

I can second PV Settlement. No BS fees and they run an efficient operation.

Chantelle P. · Answer

Thanks for your help Anthony. I'll take a look at HDH and PV to see about avoiding those junk fees!

Anthony Angotti · Answer

Hey @Chantelle P.

Which expenses specifically. Transfer tax paid by buyer is going to range from 1-2.25% for the buyer's side.

Many of the other fees are going to depend on the title company that you use and you lender. Have you shopped around both lender and title company? I'm not affiliated with either, but for commercial loans I use a variety of lenders. Most frequently a few local banks that I could give you contact info in a PM if you'd like. Also, for title company there are a few more investor friendly title agencies in Pittsburgh. I run most of my closings through HDH Settlement or PV Settlement because neither charge many junk fees.

Your Realtor will give you an estimate but the title company and lender can give you a more accurate picture because they know their fees better.