Selling a home may be the largest financial transaction you ever make in your life, and if so it’s likely you’ll have questions before you sell a house fast in Bay County, FL. One of the common questions first-time home sellers ask is: “Who pays the closing costs in a real estate transaction?”
In this blog, we cover all you need to know about closing costs. Specifically, we focus on how much you can expect these costs to be, as well as ways to avoid these.
Who Pays The Closing Costs?
Generally, the buyer and seller will each pay a portion of the closing costs. The home buyer can expect to pay around 2% to 5% of their mortgage amount in closing costs, while the seller pays about 5% to 6% of the sale price in closing costs. Generally, the buyer and seller will pay different fees, but all the fees are classified as closing costs. Here’s a closer look at the fees involved.
What Are Buyer Closing Costs?
How much the buyer pays in closing costs is in large part determined by the size of their mortgage. For example, if you’re taking out a mortgage for $200,000, the closing costs could be anywhere from $4,000 to $10,000 (depending on the deal’s terms). Here are some of the closing costs that a buyer usually pays to finalize the sale:
- Origination fee
- Home appraisal fees
- Title search fees & title insurance
- A funding fee or upfront mortgage insurance
- Escrow fees
- Credit report fees
- Attorney fees
- Notary fees
- Bank processing fees
- Recording fees
- Homeowner’s association transfer fees
- Home inspection fees
While you may be able to negotiate your way out of paying some of the costs listed above, you’ll have to pay most of them. And depending on where you get your mortgage from, you may have more or less fees. Therefore, you need to make sure you shop around for a good lender who’ll write you a mortgage that won’t break your budget.
What Are Seller Closing Costs?
Like buyers, sellers must pay closing fees as well, and generally sellers pay more in closing fees. This is largely because sellers don’t have the flexibility to negotiate closing costs away like buyers do. Here are some of the fees a seller can expect:
- Agent Commission: This is the biggest expense for the seller by far. Generally, real estate agents charge around 5% to 6% of the sale price as a commission. While this fee is shared by the buyer’s real estate agent and the seller’s, it’s usually the seller who pays.
- Fees The Buyer Won’t Cover: You may also have to pay title fees, taxes, escrow fees, and inspection fees as part of a deal.
If you’re looking to avoid closing costs when selling your Bay County home, you’re in luck. The best way to sell a house without closing costs is to sell it directly to a cash home buyer in Bay County, FL.
A real estate investor will purchase your property directly from you without any intermediary. Therefore, you won’t have to hire a real estate agent, so there’s no commission to worry about. And if you sell to a top-rated cash home buyer in Florida—like Sell Your House to Greg—you won’t have to pay title transfer fees, escrow fees, home appraisal fees, and other common closing costs.
Final Thoughts: Do Your Research To Avoid Or Minimize Closing Fees
Since closing fees aren’t fixed, there are things you can do to avoid these or reduce them. And whether you’re a buyer or a seller, you need to consider closing fees, as these could make a sale too costly if you’re not prepared. Sellers specifically can avoid these fees just by selling for cash.