I'm trying to figure out what should the buyer pay for closing costs? When my wife and I purchased our home we didn't know anything about buying a home. When I heard the real estate agent say closing costs will be 6%, I negotiated that the seller pay half. I didn't know if that was a good deal, and still don't know what a buyer should expect to pay for closing. Can someone give me a better idea?
Best bet would be to call a title company and get them to inform you. When I wholesale a deal I require the buyer to pay all closing cost.
Closing cost distribution should be included in your purchase contract. Typically, when I'm buying, I do not pay for any of the closing costs, except for items which are pro-rated (I pay my share and the seller pays his) and I pay half of the title company's closing fee (which in Nevada, is about $300 per purchase I make). Additionally, if you're purchasing where there is a HOA, you may have to prepay a few months of HOA fees.
4-5% is typical when buying and 9-10% is typical when selling. All depends on contract, financing, etc. But when estimating deals I just use 5% for buying and 10% when selling as my rule of thumb. If it comes in lower then great. If you negotiated 3% closing help, that would be pretty standard in my area.
Here is the information from the last condo I purchased. This is pretty much the bare minimum you can pay and was a cash purchase. It is important to know that I get a good discount from the title company due to my investor status, they usually charge $300. Everything else is in line and depends on the property you are purchasing.
County Taxes (4/24 to 7/1): $80.58
County Sewer (4/24 to 7/1) $35.93
HOA Dues (4/24 to 7/1) $425.60
Recording Fee: $60
Title Company Fee: $136
So my total closing costs were $738.11 or 1.03% of the purchase price.
I'll try to dig up my last flip that I did in California to give you an idea of what I paid there.
With my lender in WI the closing costs are about $1000.00 per deal. This is with no points paid at closing.
It's basically the cost of:
Loan origination fees
Awesome, thanks for breaking it down. To me it seems like you got a good deal! If you do find it and don't mind sharing, I would love the extra information.
What do I have to do to get a great deal on closing? I walked in totally blind when I bought my house and I'm pretty sure I payed more than that. They could've charged me for dog food and I would not have even realized it!
Here are the numbers from the CA Home. This was a REO and the bank required that I pay lender's and owner's title policy and would not negotiate that. They would also not pay the past HOA Dues (almost $8000), so I'll exclude that from this calculation. In this deal, I negotiated a 3% contribution to closing costs as well to offset some of the purchase costs.
Purchase Price: $394,000
Lenders Title Policy: $1294
Owner's Title Policy: $2618
Prepay Insurance: $776
Prorate Taxes: $3390
Government Recording: $160
Transfer Tax: $490
HOA Prepay: $275
Flood Cert: $9
Credit Check: $37
Loan Fee: $995
Interest Charge: $837
Home Warranty: $530
So my total closing costs were $11,741 or 2.98% of the purchase price.
See if your state has an online calculator at this site:
Are the closing cost percentages the same for single family homes as they are for multi-family? And if so, should I expect to pay 3-5%? This seems like a lot, given that my $750k purchase would have closing costs that range from $22,500 to $37500. Even if I can get the seller to cover half, this range seems a little over the top. Help?