Closing Costs

What are closing costs and who pays them? When you are purchasing a home, your lender should make you aware of the closing costs involved in the transaction.

Your closing costs can range from 1% of the purchase price up to 3%, or more, depending on the negotiating of these costs. Your largest costs tend to be the loan origination/broker fee, escrow fee and title insurance as a buyer. There are times when the buyer has written into the contract that seller will pay the buyer’s closing cost up to a certain % or amount.

The lender provides my buyers with a good faith estimate of closing costs that will include down payment money, title search, recording fees, etc. This gives them a good idea of their money outlay. Generally, the fees are negotiable. Each home purchase/home sale is different.

Below  are examples of some of the fees….

•  Settlement/Closing Fee -A fee must be paid to a settlement agent who has prepared documents, calculated figures, and oversees proper execution of closing documents. This fee is often split between buyer and seller but can be negotiated as part of the sales contract.

• Abstract of Title, Search, Title Examination, Title Insurance Commitment or Binder - In order to ensure that there are no pre-existing problems with your property, a title insurance professional must perform a title search and produce documentation on the home's title. In some places, one or more of these charges will appear separately on the HUD-1 and in other places they may be included within the title insurance premium. When a mortgage loan is involved, there may also be added charges for special endorsements that will accompany the lender's title policy.

• Document Preparation - Some settlement agents charge for the cost of preparing legal papers such as the mortgage, deed of trust, note or deed and/or other loan and title documentation. If a lender charges a document preparation fee, it will typically appear in the Loan Fees/Direct Loan Costs section of the HUD-1.

• Notary Fee - Because there are legal documents involved, a licensed notary is required to acknowledge the fact that the proper people signed these official documents in their presence. Notaries often charge a fee for their services.

• Attorney fees - Both the homebuyer and the seller might have their own legal representation to prepare and record legal documents. Frequently, however, where an attorney is acting as a settlement agent, there may only be one involved in the closing. Who pays for those services is a matter of contract negotiation but is often handled like fees paid to any other settlement agent/title agent.

• Title Insurance - There are two kinds of title insurance policies: Loan and Owner's policies. The cost for the Loan Policy is based on the loan amount and the cost for the Owner's Policy is based on the sales price of the home. Who pays these one-time fees at closing varies from state to state. Ask your settlement agent how it is handled in your area. In some circumstances, discounts may be available (such as a "reissue rate" or "reissue credit") when the property has recently been insured by a title insurer. Be sure to ask if you are entitled to any discounts.

Diana is there to help you with properties in Knoxville and surrounding areas: Halls, Gibbs, Powell, Corryton, Maryville, Oak Ridge, Clinton, Cedar Bluff, Farragut City, Fountain City, Lenoir City, Strawberry Plains, Madisonville, and Karns.

Your search for a great home not only involves your REALTOR. It involves our team working together,   along with other professionals. With our ability to work well together and with other professionals, it provides a greater opportunity for you to find your dream home and the price you can afford. You can expect honesty with the highest standard of integrity. Visit our website to see all the homes for sale. Call me at the office: 865-690-4300 or cell: 865-661-9231.

I’ll be there for your real estate needs in Knoxville, TN 965-661-9231

EXIT Realty Knoxville  ~ 201 Perimeter Park Dr. ~ Knoxville, TN 37922

865-690-4300

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