Closing costs in New Jersey

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Jim KennedyPro Member
Accountant · Cherry Hill, NJ · Member since 2016 · 173 posts · 201 votes
9y

I wanted to talk a little about lowering the percentage by lowering the fees based on my experience as a buy and hold investor for the last 12 years, and also from the cash flow experience I have acquired as a CPA.

Title is usually one of the driving forces of the closing costs. We developed a relationship with a title company and after 304 deals, we asked if they could waive this fee and that fee...it ended up being about $75 from that day to today. The problem is that in a $150,000 purchase, $75 seems insignificant, and mathematically that is correct, too. However, take the big numbers away and imagine you suddenly had $75 in your pocket. I'm sure you could find things to do with it, so go for it! Found money is found money.

And even if you don't have a relationship, ask anyway. The wire fee, the copying fee...pick at the little charges. REMEMBER THIS: For 100% of the time, the questions you DON'T ask, the answer is always "No". Let us know how you make out!

Jim Kennedy, CPA

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  • Alok SoodPro Member
    Investor · Hoboken, NJ · Member since 2012 · 56 posts · 39 votes
    9y

    Hi @Erez Friedlander, I've purchased a few properties here in NJ and have found that the closing costs vary quite a bit depending on the type of purchase/sale being made and financing (if any) being used. For example, with conventional financing, I've found that closing costs can average around 1.5-2% of the purchase price. On cash purchases this number is quite a bit less. Always better to over estimate and have to pay less at the closing table I say! Hope this helps.

    Good luck!! 

    347-735-8428
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  • Erez Friedlander
    OP
    Investor · Haifa, Israel · Member since 2016 · 28 posts · 2 votes
    9y

    Thanks @Alok Sood

    I will start with a all cash purchase so your input is a big help. Thanks again

    1Reply
  • Jim KennedyPro Member
    Accountant · Cherry Hill, NJ · Member since 2016 · 173 posts · 201 votes
    9y

    I wanted to talk a little about lowering the percentage by lowering the fees based on my experience as a buy and hold investor for the last 12 years, and also from the cash flow experience I have acquired as a CPA.

    Title is usually one of the driving forces of the closing costs. We developed a relationship with a title company and after 304 deals, we asked if they could waive this fee and that fee...it ended up being about $75 from that day to today. The problem is that in a $150,000 purchase, $75 seems insignificant, and mathematically that is correct, too. However, take the big numbers away and imagine you suddenly had $75 in your pocket. I'm sure you could find things to do with it, so go for it! Found money is found money.

    And even if you don't have a relationship, ask anyway. The wire fee, the copying fee...pick at the little charges. REMEMBER THIS: For 100% of the time, the questions you DON'T ask, the answer is always "No". Let us know how you make out!

    Jim Kennedy, CPA

    4Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    9y

    @Erez Friedlander - estimate closing costs at around 3%. I have seen it get closer to 4% in certain instances, but 3% should prepare you safely. Just make sure to get a GFE as far in advance as possible so you are clear on the costs and so there are no surprises down the road.

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    1Reply
  • Joseph ScoreseBusiness Member
    Banker · Philadelphia · Member since 2009 · 2k+ posts · 634 votes
    9y

    Hi @Erez Friedlander,

    Welcome to BP!

    Have you used an online title fee calculator. They are great and up to date, most Local Title Companies have them online for there customers and clients.

    Let me know if you have any questions.

    Regards,

    Joe Scorese

    1Reply
  • Erez Friedlander
    OP
    Investor · Haifa, Israel · Member since 2016 · 28 posts · 2 votes
    9y

    Guy's thank you very much for all the great tips.

    @Jim Kennedy I totally agree with you, every free dollar has it's value and I will now start to look deeper in connecting with a title company.

    @Jonathan Greene awesome tip thank you. Though.... i looked into the calcs but it seems that they are relevant only if I'd purchase with a loan, is that correct?!  

    0Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    9y

    @Erez Friedlander , no, of course no GFE with cash, but at least request a modified closing costs version from your title company/attorney relationship involved.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
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  • Joseph ScoreseBusiness Member
    Banker · Philadelphia · Member since 2009 · 2k+ posts · 634 votes
    9y

    Hi @,

    Please pm me and I will send you my contact information. I can forward you the link for refinance and purchases.

    Regards,

    Joe Scorese

    0Reply
  • Erez Friedlander
    OP
    Investor · Haifa, Israel · Member since 2016 · 28 posts · 2 votes
    9y

    @Jonathan Greene thanks for your reply.

    I am currently looking at Cherry Hill, NJ to start with, would you have a referral for a trust worthy title company/attorney ?

    0Reply
  • Jessica Zolotorofe
    Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
    9y
    So with a cash deal, if we're strictly talking about residential, you are really looking at title, attorney, filing fees, and then your inspection and if you get a survey. There will also be tax, sewer and rent adjustments, if applicable, which depending on what date you close could be a plus or minus on your side. VERY roughly, title would be, give or take $3000 (for searches and owner's policy), but that's on a sliding scale depending on purchase price. Attorney for a regular, nothing unusual residential closing in NJ is probably around $1,200. Filing fees should be minimal with no mortgage. Inspection and survey, maybe another $1500-2000 wholly dependent on the extent of inspections you do. Selling costs are a whole different ball game because you have brokers fees and transfer tax (over $1,000,000 purchase price you'll also have a "mansion tax" payable by the buyer, but not under that threshold). Hope that helps some!
    1Reply
  • Jessica Zolotorofe
    Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
    9y

    Also, in NJ we use title companies AND attorneys. Attorneys don't act as title agents here like they do in some states, like FL, so finding an attorney you're comfortable with  is  a  good place to start and they probably have a few title companies they work with that they can refer you to that they know are good and attentive. 

    1Reply
  • Odie Ayaga
    Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
    9y

    Hi @Erez Friedlander. In terms of title companies you can look up Foundation Title in Marlton. I'm only on House 1 so I can't claim a breadth of experience, but they were who I used and I didn't have any issues

    0Reply
  • Erez Friedlander
    OP
    Investor · Haifa, Israel · Member since 2016 · 28 posts · 2 votes
    9y

    @Jessica Zolotorofe that's some awesome advises and explanations. Thanks alot. Would love to stay in contact.

    @Odie Ayaga thanks for the recommendation, I will certainly look them up.

    0Reply
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