Yeah, that’s high. If there’s nothing to pay at closing like inspections, surveys, etc. my closing costs usually run around $1,000, but no more than $1,500.
All cash closing should be less than one with financing. The attorney fees alone for me have been ~$550-$900 area
You don't itemize the closing costs for us nor tell us how much you are paying for the property. I would expect NC closing costs for a median priced property to run less than $2000 for the attorney fee, doc preparation fees, title search, title insurance, prorated property taxes and recording fees. A good faith etimate is exactly that -- an estimate and it may include some costs that you will not incur. Your actual costs may differ depending upon the attorney you choose for the closing.
I concur with @Dave Toelkes . You'd need to line itemize the closing costs and tell us how much you're buying the property for to get a real opinion of where you might be getting hosed, if anywhere.
For an example, on a recent $200k cash purchase closing I had here in Raleigh, I paid $550 to the attorney for his fee to conduct the title search and close the loan (this is higher than I typically pay but I closed at an atty's office that I don't usually close at due to other semantics surrounding the deal itself and the seller).
The title insurance premium was $361.57 and I paid $26 in recording fees. For a grand total of $937.57 in closing costs.
If you're closing on a property this time of year, before tax bills have come out - you shouldn't be charged or paying for anything for the taxes at the closing. Rather, you should be receiving a credit from the seller for his pro-rated portion of the taxes (for Jan 1st, 2018 through the date you close), as you will be expected to pay the entire year's tax bill once it comes out in September).
The only exception I can think of to this is if the seller is behind in taxes for previous years, in which case this should still be a seller's side debit/charge and not one for your side, as the buyer. Unless the seller doesn't have the money to pay it and you've agreed to pay them .. and the attorney already knows this and is reflecting this in his 'quote'. But I doubt this is the case from the sounds of it.
I have purchased properties before where there were incredibly complex title searches, where multiple estates were involved, heirs died without a will, hand written deeds in the chain with incorrect or incomplete legal descriptions, etc. - and in instances like these, I've paid the closing attorney upwards of $1k - $2k just for his fee alone. But since he had to put in several hours of additional time and effort over and above the norm over the course of many weeks to get the title to a place where it could be considered marketable, I did not consider this to be unreasonable.
Without some extenuating outside circumstances like this, I find it difficult to think of a scenario where you should be paying $3,500 in closing costs or over $1,750 in attorney fees, even if this included the title insurance premium on a more expensive property and a couple of 'junk' fees (IE - copy fees, toner charges, courier or carrier pigeon fees, etc).
But again, if you'd like a more in depth analysis, you'd need to give us a line item breakdown of each fee.
If you'd like a recommendation for another closing attorney in the area that should charge you considerably less, feel free to PM or email me.
@Emeric Harney Why don't you provide the BP community the itemization of the fees so we can provide some local perspective?
Hi all, thanks for the notes. The attorney's estimate apparently was boilerplate, rather than tailored to my actual closing. Purchase price was $130k and we are waiving inspections etc.
Looks to be more like $575 for attorney fees, the title insurance $300 or so(tack on hopefully), recording fees. So looking to be less than $1000, which feels more appropriate for a cash buy.
@Emeric Harney Ahhh, another of life's great mysteries has been solved! Thanks for the update.
As a cash buyer, I pay the attorney $500, about $350 for title, $450 for house inspection, plus HOA and taxes. Unless the majority of your costs are for taxes and HOA fees, seems really high.