Definition
Think of closing costs as the fees and expenses needed to complete the transaction—title insurance, appraisal, inspections, attorney fees. They typically run 2-5% of purchase price.
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Closing costs are the expenses associated with completing the real estate transaction. Buyer costs typically include appraisal, inspection, title insurance, loan fees, and taxes. Seller costs include real estate commissions, title insurance, and transfer taxes. Closing costs typically range from 2-5% of the purchase price. Understanding what closing costs will be is important for budgeting. The Closing Disclosure form details all closing costs at least 3 days before closing.
Pro Tip
Request closing cost estimates early so you can budget properly.
Example
The buyer's closing costs totaled $12,500, including $500 appraisal, $400 inspection, and $800 title insurance.