What Are Closing Costs?

    Closing or settlement costs are an accumulation of charges paid to multiple entities for the professional services associated with buying real property.

    Here is a quick guide on who pays what at the close of escrow:

    What Sellers can generally expect to pay for:

    • Owner’s Title Insurance Policy premium
    • Real Estate Commission
    • One-half of the escrow fee (charges for services/documents by escrow to transfer title)
    • Any loan charges required by Buyer’s lender specified in contract
    • Pay off charges plus any fees, penalties and interest on loans made by the seller
    • Repair work specified by purchase contract
    • Encumbrances of record against the Seller
    • Prorated property taxes and or delinquent taxes to date of close
    • Unpaid HOA dues or assessments of record
    • HOA transfer fee
    • HOA Disclosure Statement

    What Buyers can generally expect to pay for:

    • Lender’s Title Policy (insures new lender’s lien position)
    • One-half of the escrow fee
    • All new lender charges (document preparation, appraisal, loan origination, credit report, points, underwriting fee, etc.)
    • Recording fees for all buyer documents
    • Prepaid interest on the new loan
    • Hazard Insurance premium and impounds


    Source: First Arizona Title Agency – Home Buying Guide

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