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Understanding Closing Costs

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Closing costs are fees that are paid as part of a real estate transaction. Because buying a home is a contract between a seller and a buyer, and the property changes hands, there are various costs and several people involved.

In most cases, there are four categories of closing costs:

Lenders Costs – To obtain a home loan, there are costs incurred by the lender to pay the processer, underwriter and closer. These costs are generally passed on to the buyer. There may also be loan origination fees depending on the type of loan the buyer is getting.

Third Party Expenses – Credit reports, property appraisalsinspections, etc. are paid to a third party vendor for providing or performing these services.

Legal Fees – Attorney’s fees, title search fees, title insurance and recording fees are costs that may fall into this category.

Pre-paid Expenses – Interim interest, homeowner’s insurance and property taxes are ongoing costs of homeownership that may be paid in advance, up front at closing.

In some situations, it can be negotiated in the purchase contract to have the seller pay some or all of the closing costs. As your real estate agent, I help you negotiate these costs. If you are interested in discussing this in more detail, please give me a call at 214-769-2947. I would love to discuss this with you.

Beth Brake:Realtor-Team Lead

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