Term Tuesday: Closing Costs

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Closing costs are expenses incurred by buyers and sellers in addition to the the price to the home which are used to pay for services and miscellaneous fees in a transaction.

Common closing costs include: impound, escrow, title, pro-rated taxes, transfer tax, reports, real estate commissions, document recording fees, courier fees and other various fees specific to the transaction.


Generally speaking, a seller can expect to pay approximately 1.5% + commissions and a buyer can expect to pay approximately 3.5% of the property price in closing costs. It is advisable to request a closing cost net sheet from your agent at the beginning of a transaction so that you are aware and prepared for these costs.

Occasionally, buyers will ask sellers to pay a portion or all of their closing costs. However, in an aggressive market (as we have today), asking for any concessions tends to weaken your offer. Be sure to have these discussions with your agent before you start viewing properties.

If you are considering a VA Loan, know that some of the buyer's closing costs must be paid by the seller. The buyer's loan officer will advise what this amount might be, and it is required to be listed in the offer.