Seller and buyer closing costs can really add up. High seller closing costs and fees can cut into the profit a seller is expecting to pocket from the sale of his or her home or increase the amount of money the seller needs to come to the closing if the seller owes more money on his mortgages than the amount he or she will net from the sale of the home.
Likewise, buyer closing costs can increase the amount of money a buyer needs to close on the purchase a home.
We have several other articles on ThinkGlink.com that list the endless seller and buyer closing costs you’ll encounter when you buy or sell property. You should read those articles for more detailed information on the seller and buyer closing costs you’ll encounter. You can link to these other articles here:
Addressing the Forgotten Seller and Buyer Closing Costs: TitleTitle refers to the ownershipOwnership is the absolute right to use, enjoy, and dispose of property. You own it! of a particular piece of property. InsuranceTitle Insurance is insurance that protects the lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate. and the property owner against losses arising from undisclosed defects or problems with the title to property. and Survey Costs
Most people remember many seller and buyer closing costs but two closing costs that are at times forgotten are title insurance expenses and survey costs.
In just about every state, the buyer must pay for title insurance expenses related to their loanA Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds.. with their lender. In some states ,the seller pays for the owner’s title insurance policy as a seller closing cost. In other states, the buyer pays for the owner’s title insurance policy as a buyer closing cost.
An owner’s title insurance policy insures the new buyer of the home against title insurance problems and issues. Done right, an owner’s title insurance policy will protect a buyer against forged documents, lienA Lien is an encumbrance against the property, which may be voluntary or involuntary. There are many different kinds of liens, including a tax lien (for unpaid federal, state, or real estate taxes), a judgment lien (for monetary judgments by a court of law), a mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home. lien (when you take out a mortgage), and a mechanic's lien (for work done by a contractor on the property that has not been paid for). For a lien to be attached to the property's title, it must usually be filed or recorded with a local county government office. claims, undisclosed easements and other agreements, and claims by others against the new buyer’s ownership interest in the property.
Finally, in many states, if you want to make sure you know what you are buying and that there are no title insurance problems or issues relating to property boundaries or other survey issues, you need to come to the closing with a plat of survey.
The plat of survey will depict the building and other structures located on the land you are buying and draw out any potential problems with that particular piece of land. If the neighbor’s garage is actually a foot onto the property you are buying, the survey should disclose that.
For more information on surveys, read:
STATE BY STATE GUIDE TO PAYING FOR TITLE INSURANCE AND SURVEYS
SEE BELOW TO DETERMINE THE PARTY THAT MAY BE RESPONSIBLE FOR THE PAYMENT OF TITLE INSURANCE COSTS AND SURVEY EXPENSES FOR THE FOLLOWING STATES:
|DISTRICT OF COLUMBIA||Buyer||Buyer|
|SOUTH DAKOTA||Divided equally||Buyer|
Use this information only as a guide in determining buyer or seller closing costs when planning for your home purchase or sale. Keep in mind that some of these costs may change from county to county, depending on the custom in each county. For more information, you can call a title insurance company in your area and ask them to tell you who typically pays for these expenses in your area or talk to a real estateReal Estate is land and anything permanently attached to it, such as buildings and improvements. attorneyA Real Estate Attorney is an attorney who specializes in the purchase and sale of real estate. in your community. Frequently, most real estate sales agents and brokers are also quite knowledgeable on the issue of who pays for what when it comes to some of these expenses.
You should also know that title insurance costs vary from state to state. For example, in some states, the owner’s title insurance policy on a $100,000 home may cost $1,500 and that same policy in a different state may cost two or three times that amount. Furthermore, title insurance fees seem to multiply if you are buying a home and you have a lender involved. With a lender, buyer closing costs can mushroom by including a lender’s title insurance policy along with “required” endorsements.