The buyer and the seller aren’t the only people involved in a real estate deal. Many professionals work to ensure a smooth and legally compliant transaction, and a sale may also include appraisers, inspectors, and real estate agents. Their fees and other expenses are covered through closing costs.
But what are closing costs, and who pays for them? Read further to look into the fees.
What are closing costs?
When buyers take out mortgage loans, they have to pay around 2% to 5% of the home’s value in fees. Depending on the size of the loan, this fee could range from a few hundred to a few thousand dollars. In addition, this fee includes appraisal fees, title searches, credit checks, and more. The total sum of this fee is collectively called closing cost. In some instances, it could also include realtor commission and attorney fees as well.
Who pays for closing costs?
In a conventional sale, both the buyer and seller pay for closing costs. However, while buyers have to bear expenses related to the mortgage loan, sellers must undertake real estate commissions for the buyer’s and seller’s agents.
Some of the expenses incurred by the buyer include appraisal cost, property tax, HOA fees, and a homeowner’s insurance policy premium. The seller’s expenses include real estate commissions for the buyer’s and seller’s agents.
Who pays for closing costs in a cash home deal?
One of the best things about a cash home deal is that sellers don’t have to pay expenses for real estate agents. Since the house is purchased directly from the seller and neither party has hired a realtor, closing costs are practically zero. The seller also doesn’t have to pay for mortgage costs, appraisal fees, home inspection reports, title insurance, underwriting fees, or an origination fee.
The buyers cover all expenses in a cash home deal, including closing costs and title insurance expenses. At Sell House Fast MKE, we’ll buy your house and manage all related expenses. As a seller, you have nothing to do except sign on the dotted line at the appointed date and time.