A Breakdown Of "Closing Costs" Part 2

A Breakdown Of “Closing Costs” Part 2

by Richard Schwartz

7. Attorney Fees (if applicable)

What it is: In some states (like New York or Massachusetts), a real estate attorney is required to oversee closing.
Cost: $500–$1,500, though it can climb higher for complicated deals.
Details: The attorney might review contracts, handle title issues, or attend closing. Even in states where it’s optional, some buyers hire one for peace of mind.

8. Survey Fee (if required)

What it is: A professional survey to verify property boundaries and identify easements or encroachments.
Cost: $300–$1,000, depending on the lot size and complexity.
Details: Not always mandatory, but lenders or title companies might require it for rural properties or if boundary disputes are suspected.

9. Transfer Taxes (or Documentary Stamps)

What it is: Taxes imposed by state or local governments when property ownership changes hands.
Cost: Varies widely—some states have none, others charge $1–$5 per $1,000 of the sale price. For a $300,000 home, this could be $300–$1,500.
Details: Who pays (buyer or seller) depends on local norms. For example, in Florida, the seller typically covers it, while in Illinois, it’s often the buyer.

10. Prepaid Costs (technically part of closing)

What it is: Advance payments for property taxes and homeowners insurance, often deposited into an escrow account.
Cost: Varies—could be a few months of taxes (e.g., $500–$2,000) and a year of insurance ($800–$2,000).
Details: Lenders require this to ensure these bills are paid. The exact amount depends on your closing date and local tax cycles
Example Breakdown

For a $300,000 home with a 3% closing cost estimate ($9,000), it might look like:
- Loan origination: $2,000
- Appraisal: $400
- Title insurance: $1,200
- Title search: $300
- Escrow fees: $500
- Recording fees: $150
- Transfer taxes: $600
- Prepaids (taxes/insurance): $3,850
- Total: $9,000
Key Variables
- Location: High-cost areas (e.g., California) or places with transfer taxes (e.g., New York City) push closing costs higher.
- Negotiation: Sellers might cover some fees—like title insurance or transfer taxes—in a buyer’s market.
- Loan Type: FHA or VA loans might include additional fees (e.g., funding fees), though some are rolled into the mortgage.
You’ll get a precise tally in the Closing Disclosure, a document lenders provide three days before closing.