What are Closing Costs?
Many first time buyers and sellers are not aware that there are additional costs when it comes to buying and/or selling property. These costs depend on the type of property that’s being bought or sold, how a person is paying for the property, who they will use to broker the deal, who they will use to close the deal, and on whether or not they want to order any inspections.
As one might imagine, a lot goes into the process of buying and selling property…closing costs are one part of the transaction that need to be considered before you begin the process.
Closing costs with regard to NC real estate are any and all additional costs associated with buying or selling a property. Buyers and sellers both have closing costs, but they are for different things and the amounts vary.
Buyers will generally pay between 2-5% of the purchase price of the home, and sellers should expect to pay between 8-10% of the sale price. (The main reason for the difference is due to sellers paying the realtors commissions.) For buyers, closing costs are additional to the purchase price of the home and will be included in the amount they bring (or wire) to the table on closing day. Seller’s closing costs usually come out of the proceeds on closing day; the attorney breaks it down and writes the checks to all parties owed and gives the balance to the seller. (For a great real estate attorney in the Asheville area, check out Phillip Price Law.)
Both buyers and sellers will pay attorney fees…the buyer will pay for a title search, and sellers pay for document preparation. Both will also pay pro-rated taxes, insurance and possibly HOA dues as well, for the months of the year that they each own the home.
Most closing costs are paid on the day of closing, but a buyer has the option to conduct inspections on the property during the due diligence period. These inspections are usually paid out of the buyer’s pocket as they are completed.
**Download a free Buyer’s Guide here!