Definition of "Closing costs"

- What are the closing costs?

Closing costs are the fees and expenses paid during Closing. They are not included in the final purchase price of the property.

- How much are the closing costs?

Normally, the closing fees are somewhere between 2 to 5 percent of the final purchase price of the property.

- What is included in the closing costs?

That varies from state to state, the type of property in question and the type of loan the bank gave to the home buyer. But here is a list of expenses typically included:

Application fee
Appraisal
Credit report
Escrow fee
Home Owner Association’s Transfer Fee
Private Mortgage Insurance (PMI)

And many more…

- Who pays the closing costs?

Typically the home buyer, but you can try to negotiate with the Home Seller. Some Home Sellers do accept to share or even assume this burden, most of the times deducting it from the final purchase price of the property. That's why Understanding the Housing Market on your Own is important. If you're in a Buyer's Market, a Home Seller will likely cede in order to sell his house once and for all.

 

Real Estate tips:

Take a look at our Glossary to find other terms and kick your real estate vocabulary up to a new level!

Also search through The Official Real Estate Agent Directory® to find a trustworthy agent to help you in all stages of a home sale.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Latin for pending the suit. A suit which is actually in progress and the outcome is pending. ...

The broad use of credit to purchase a security. ...

Person who leases rented premises from the initial lessee. The sublease is for a time not exceeding the original lease period. ...

The basic definition of an acquisition loan is the kind of loan that gives a company the funds necessary to make a purchase. The type of investment depends on the company’s activity, ...

Examining and testing the ground to determine the conditions for building something, such as an office building. ...

A portion of a real estate company's assets financed with debt instead of equity. It involves interest an principal obligations. Financial leverage is beneficial to real estate investors ...

lender who charges an exorbitant interest rate, which is typically illegal because it exceeds the interest rate allowed in the state. A borrower may go to a loan shark if he cannot obtain ...

What does contribute mean in everyday scenarios? The official “contribute definition” goes as follows: providing a thing of great value, regularly money, to help accomplish a ...

Same as term plat book: Listing of all of the plats of subdivided plots in a jurisdiction showing the location, boundaries, and plat owners. A plat book normally shows other improvements ...

Popular Real Estate Questions