Who Pays What Closing Costs?

After you have chosen the perfect house, you will need to deal with the closing. Fortunately, your agent will take care of this. Before the actual date, you will be presented with the settlement statement that will detail the closing cost. But who will pay for it? How much will you pay and how much will the seller will shoulder? These are essential questions because you have to prepare the needed amount for the closing and for the ownership to be successfully transferred to you. To shed some light as to who pays what amount, here are some helpful information:

The closing costs are normally paid by the seller and the buyer. They decide among themselves how much the other should shoulder. Some of the costs that are normally paid by the buyer are the fees for processing the mortgage, the transfer taxes, title insurance and more. Your agent should be able to discuss the fees and charges with you ahead of time.

Ask for a GFE:

To know how much you will need during the closing, you need to acquire a good faith estimate (GFE) from the lender. This should be easy, as lenders are required to provide you with one. Aside from that, you should be notified in case there will be changes of the GFE. Acquiring the said estimate is essential because this will help you compare the fees and charges of different lenders. Moreover, you will also know about the different fixed costs and the costs that you can negotiate.

Ask the seller to pay a portion of the closing cost:

In this type of market, you can easily negotiate with the seller to pay a portion of the closing cost. Most sellers are willing to do this to attract buyers. The trick there is to make a decent offer. When you do, the seller would be willing to listen to your demands, and they will be very much willing to help settle some of the closing cost. They may pay for the home insurance. This has even become one of the selling strategies of many sellers. What you need to agree on is the charges that the seller will be paying during the closing.

It is essential that you make distinct agreement as to how much the buyer and the seller will pay. Bear in mind that the seller will also want to get a good value for the property. Be specific as to what items you want him to pay. Make sure that you indicate the amount and that he understands it before agreeing.

The closing is an important part of the purchase of the property. Here, the actual transfer of ownership is done. The papers are reviewed by the buyer and the seller and they agree to it by signing the documents. In addition to signing, the fees and other charges, collectively known as closing costs should be settled as well. The seller and the buyer will negotiate who will pay what charges. The buyer can use the information in the good faith estimate to negotiate with the seller before agreeing to purchase the property.

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