What Buyers Need to Know About Closing Costs

Buying a home is one of the most significant purchases most people will ever make. And, just like when you go shopping at the store, the sticker price is not the home's total price. This can come as a shock to many first-time home sellers and first-time homebuyers alike, which is why our REALTORS® want you to know everything about closing costs and how they affect the final price you pay for your new dream home.

• Fees and Commissions
  You will also need to factor in real estate agent fees and commissions. These can be around 6%, but they vary depending on the agent. The seller is the party that typically pays the agent fees and commissions. The seller also pays for title insurance and any pro-rated property taxes on the property. It is also the seller's responsibility to pay any HOA fees, attorney fees, and escrow money owed to the buyer. To help ink the deal, some contracts allow the seller and buyer to split, or have the buyer pay 100 percent of, the owner's title fees on cash deals.
  
  
• Closing Costs
  As of the first half of this year, it's estimated that nationwide the average closing costs associated with a single-family home sale are just over $6,837. But, again, these vary depending on location and home value. In Washington DC, a seller may end up paying more than $30,000, while in nearby Indiana, that same seller may only need to pay $2,000.
  
  
• Other Fees
  There are also a number of fees to factor in. These include the appraisal fee, home inspection fee, title search, and title insurance. The appraisal fee is typically paid long before the sale is complete, but it is considered a closing cost. Similarly, the home inspection fee is one you won't mind investing in. Even in the hottest real estate market, you should never purchase a home without performing a thorough home inspection.
  
  
• Title Search
  Unless it is a brand new home, your lender will require a title search to ensure there aren't any tax liens or other encumbrances that could hinder the sale. Likewise, lenders will require the buyer to secure title insurance just in case there are issues with the ownership of the property that arise after the sale.
  
  
• Buyer Fees
  For buyers, there is also the credit report fee, application fee, loan origination fee, underwriting fee, and points to consider. Credit report fees are typically around $25, and application fees are around several hundred dollars. Origination fees are typically calculated at a fixed percentage, usually between .5 to 1% of the amount borrowed. Similarly, underwriting fees can be a flat rate, but they are usually around .5% of the amount borrowed.
  
  
• Property Taxes
  When you purchase any of the fabulous Mansfield and Ashland homes for sale right now, you won't want to forget about the tax man's cut. The amount owed always depends on the price of the home and the home's location. In Mansfield and Ashland, you have to pay 1 mill, or $1 per every $1,000 of the property's value. Further, depending on the county, you may need to pay a real property transfer tax which can add up to 3 mills, or $3 per every $1,000 of the home's value.

We know you have plenty of questions about purchasing real estate in Ohio. We encourage you to contact us to speak with our agents to learn everything you want to know about the different types of taxes, fees, and commissions that go into closing a real estate transaction.