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An overview of closing costs for homebuyers and sellers

On Behalf of | Jun 1, 2018 | Residential Real Estate

Homebuyers in Delaware often focus on the prices listed for properties, but price alone does not represent the total amount that a person will spend when purchasing a home. Numerous fees, insurance premiums and commissions create what are known as closing costs. Closing costs routinely total several thousand dollars. A typical property transaction will split these costs between the buyer and seller, although the parties can negotiate the details and shift some expenses one way or the other.

In general, a property transaction will obligate buyers to pay fees for mortgage loan processing, home inspection, home appraisal and title search. Additionally, home property insurance, points charged by a lender and credit screening will add to a buyer’s costs. He or she also must pay local government recording fees and escrow fees that create a fund to cover property taxes and insurance for several months. If a buyer chooses to consult a lawyer, then the closing costs will include legal fees.

Sellers need to factor in some closing costs as well. They typically pay the commission for a mortgage broker and buy title insurance for the property for their own protection. Sellers have a responsibility to pay the sales commission to the agent as well.

Every home sale has some unique characteristics, and a person could consult an attorney to gain legal insights when questions arise about residential real estate. A lawyer could inform his or her client about which property disclosures must be present according to the law and review the terms of a purchase agreement. Legal advice could alert someone to potential liabilities. An attorney might manage negotiations about the terms of a deal when a client desires alterations. Other issues, such as zoning laws or title problems, could be investigated so that a person could make informed decisions about a high-value transaction.