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What
are Closing Costs?
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Closing
Costs, also called settlement costs, are the costs of
the sale (or refinance), charged to either the buyer
or the seller (or owner, in the case of a refinance)
depending on the type of cost. Local custom usually
dictates how these charges will be divided unless the
buyer and seller negotiate otherwise. Sometimes the
lender will specify who is to pay certain costs, particularly
with FHA or VA loans.
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When
someone wants to get technical with you, they might
start talking about recurring closing costs and nonrecurring
closing costs:
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| 1.
Nonrecurring costs are one-time charges and fees. |
| 2.
Recurring costs are costs which will occur at the time
of the sale, but will also occur in the future, such as
real estate taxes, or interest on the loan. |
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| Who
pays what is always negotiable between the buyer and the
seller. But there are customs typically followed in each
county. In Contra Costa County: |
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The
SELLER will generally be expected to pay for:
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| Real
Estate Commission |
| Documentation
preparation |
| Deed
Document recording fee |
| County
Transfer Tax |
| Loan
fees required by the buyer's lender |
| Notary
Fees |
| Any
city transfer/conveyance tax |
| Special
courier/delivery fees |
| Payoff
of all loans in the sellers name |
| Interest
accrued to the old lender |
| Lender
payoff fees |
| Homeowner's
Association transfer fee |
| Prorated
share of homeowners dues |
| Bonds
or assessments (per the sales contract) |
| Termite
inspection and Section I repairs |
| Natural
Hazards Disclosure report |
| Home
warranty |
| Any
delinquent taxes |
| Any
judgment, tax liens, etc. against the seller |
| Prorated
share of the property taxes |
| Recording
charges to clear all documents of record against the seller |
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The
BUYER will generally be expected to pay for:
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| Title
insurance premiums |
| Escrow
fees |
| Notary
fees |
| Document
preparation fees |
| Document
recording fees |
| Prorated
share of the property taxes |
| Buyer
ordered inspections (roof inspection, property inspection,
etc.) |
| Special
deliver/courier fees |
| All
new loan charges (except those required by lender for
seller to pay) |
| Interest
on new loan from date of funding to 30 days prior to first
payment date |
| Fire
insurance premium for the first year |
| Preliminary
change of ownership fee |
| Assumption/change
of record fees for takeover of an existing loan |
