New to the real estate game? A little freaked out about all of the costs that you may or may not know about? We are here to help. If you’re ready to make your move and plant some roots in KC or just want to relocate within the city, then it is critical to make sure that you set aside money for your new home’s closing costs. If you’re unsure about what closing costs are and how much money you will drop on them, stay tuned.
What Are Closing Costs?
The costs of buying a home can run high. Between your down payment, commission fees, staging, and repairs, those dollars add up pretty quickly.
Closing costs are the total service fees associated with finalizing the sale of a property. So, if you and the seller agree on the property price of $200,000, then expect your closing costs to increase your total cost.
What Fees Makeup Closing Costs?
Some of the fees included in the closing costs are:
- Appraisal fee ($300-$400)
- Home inspection ($300-$500)
- Title search ($200)
- Application fee for a home loan (varies)
- Loan origination fee ($0.5% of loan total)
- Property taxes (estimated two months)
- Homeowner’s insurance (depend on house value and location)
- Homeowner’s association (HOA) fee if applicable (varies)
- Mortgage insurance application fee (varies)
- Property transfer tax – if you are a seller.
But not every buyer will encounter all of these fees during the closing portion of a property sale. In fact, some closing cost fees such as property taxes and any homeowner association dues that get covered by the buyer and others by the seller. This is normally decided during the negotiation period. Regardless of which role you play, it’s important to become familiar with them.
Seller Closing Costs
When selling a home, the seller pays off the loans to clear the title. The seller may pay for the commission of both realtors depending on your state and municipality. Property taxes and the transfer of the title may be the seller’s responsibility, but it’s negotiable.
Buyer Closing Costs
The buyer handles the majority of the closing costs fees. Some of the fees need to get paid before you actually attend the closing. The application for a home loan, loan origination fee, home inspection, title search, and mortgage insurance application fee get done before attending the closing.
How Much Are Closing Costs?
While the total cost of buying a home varies, the closing costs usually run between 2% to 5% of the total loan amount. Yet this depends on the cost of the home and where it’s located. But if your new home costs $200,000, then a 3% closing costs brings the total price to $206,000.
Ready to Buy
Buying or selling a house is a process. But now that you’re informed on the closing costs of a home, it’s time to move into the Sunflower State.
Are you ready to sell your home or looking to buy in the Kansas City area? Contact our team at Cami Jones & Company today. We’ll help you through every stage of the process and ensure you are as stress-free as possible. We’re here to meet all of your Kansas City real estate needs!