When you buy and sell a home there are a lot of things to consider like the style of the home, the size, the area, school districts etc. Don’t forget you need to plan for up front costs to be able to buy the home not just how much you plan on spending each month and the down payment.
Whether you are buying or selling there are closing costs involved to be able to buy or sell. Many times when I work with a first time home buyer they have not thought or perhaps not even aware there are extra costs involved. They vary depending upon the price of the home and whether you are buying or selling. I’ll do my best to explain the difference and help you plan for your next MN home sale.
Buyers costs are almost always higher than a sellers costs, out of pocket anyway, for a few reasons and the biggest is the is due to the mortgage. I tell my buyers that closing costs as a whole usually average 3.5% of the home price give or take a bit depending on smaller specifics. But 3.5% is a good mark.
Here is a breakdown of average costs;
- Loan origination fee = usually 1% of the loan amount
- Appraisal fee = $400
- Credit report and admin fees for the loan = $500
- Title Fee = $300
- Broker Admin fee = $300-500
- Title Insurance for lender = $700
- Owner title insurance = $300-400
- State fees = $200
- Prepaid insurance and taxes = usually 3-6 months placed into escrow
Hint, hint! As a buyer you can ask the seller to pay for some of your costs for you.
Here is a breakdown of the average sellers closing costs;
- Biggest by far is the commission for the listing broker and selling broker (seller pays for both sets of agents and brokers) = 5-6%
- Deed transfer tax = $3.40 per 1000 of the sale amount
- Closing fee = $300
- Title Work = $300
- City inspections (if required)= $150
- Taxes = prorated according to the contract
Of course there will always be variables to any deal so this list is just a typical list for many people but your situation may be unique. If you are looking for an experienced and well qualified person to handle your next real estate transaction please contact me for a consultation to see how I can help you with your next move.