Who Pays Closing?

When you buy a home there are many costs that may be incurred related to the transaction and are not a part of the actual purchase price of the home. These extras are known as closing costs and are usually between 2 and 5 % of the purchase price of the home. Most of the times it is the buyer who pays these closing costs. These costs are actually negotiable and it is possible to share them with the seller and at times have the seller pay for all of these costs.

Closing costs are fees charged by the lenders and third parties which are related to the purchase of the home. Closing costs vary widely depending on where you live and the property you buy. Most of the times these costs include things such as:

• A fee for your credit report.
• A fee that is charged by the lender for processing the loan.
• Lawyers fees.
• Charges for any inspection that is requested by you or the lender.
• The appraisal fee.
• The survey fee.
• Title search fees.
• Title insurance.
• Escrow deposit.
• Recording fee.
• Underwriting fee.

As the above fees indicate they are expenses which are normally associated with the buyer so that he can verify the property and its records and get the mortgage from the lender. It is because of this that most of the times the buyer pays for the closing costs. But it may be possible for the buyer to get the seller to accept some of these costs or in some cases the seller may bear all of these costs since he is getting his asking price or he may be in a hurry to sell his property.

Though closing costs are a part of the transaction of buying a home or property, at times these closing costs can be negotiated with the lender and be reduced. There are also certain lenders who will include the closing costs in the mortgage so that the buyer does not have to have the money upfront before he gets his mortgage. But these kind of mortgages are a bit more expensive since the buyer will have to pay interest on the closing costs. Depending on the situation and the willingness of the seller, it is not always that the buyer has to pay all of the closing costs. He can negotiate with the sell and get him to agree to pay a part of the closing costs or at times even get him to pay all the closing costs.

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