Who Is Responsible For Closing Costs

Buying or selling a home is a euphoric experience for both of the parties involved. This euphoria can cool when you learn which party is responsible for the closing costs. Who Is Responsible For Closing Costs When looking to buy or sell a home, every person eventually arrives at the question of funding closing costs on the transaction. To put it simply, both buyers and sellers typically are responsible for some of the closing costs. However, the exact amounts paid can vary significantly from area to area and depending on what agreements the buyers and sellers come to in the offer-counteroffer process. It is important to research the area you are looking to buy or sell in and be knowledgeable regarding any laws and standards of practice for the area. Yes, the requirements are different in each state and often each city. Know what you will have to pay ahead of time so you can be prepared to cover these costs. Here are some examples of what buyers and sellers generally have to cover. Buyers typically pay the following: fees charged for obtaining a mortgage; inspection fees; homeowner's insurance (must be prepaid for one year at closing); transfer taxes if there are any (although the seller may pay these or they may be shared 50-50 between buyer and seller); title insurance and escrow fees (varies depending on the location); and attorney's fees (if and where attorneys are involved in the transaction). If you are confused, a mortgage broker can tell you which fees are customarily paid for by the buyer in your area and how much they will cost. When buying a home, the use of mortgage brokers is highly recommended to both get a great deal on a mortgage and help with the transaction itself. The broker only gets paid if the deal goes through, so you know they will make every effort. Sellers' closing expense responsibilities typically include: loan payoff fees; the real estate commission (in some cases, a portion of this may be paid by the buyer); title insurance (depending on the location); termite repairs (this is negotiable in some areas); cash payments in lieu of repairs to the property; all or part of transfer taxes and escrow fees, if there are any; attorney's fees where applicable; and other fees set by local custom or negotiated during the transaction. Knowing and researching the area you are buying or selling in is critical to understanding who is responsible for closing costs. Educate yourself and you will avoid overpaying.

A Word of Warning About Home Inspections When Buying

When you make the decision to purchase a home, you are committing to a lot of debt. You want a home inspection, but be careful with your choice of inspectors.

A Word of Warning About Home Inspections When Buying

When purchasing a home, it should be required that the buyer set up a home inspection on the home. This home inspection is designed to ensure the home is in good condition and to notify the buyer of any potential problems in the home. However, there are some things that potential buyers should be aware of when having a home inspection done.

In order to ensure that the home inspection goes properly, it is important for the buyer to be careful about which home inspection service to go with. Often times, the seller or seller’s realtor will make a suggestion for a home inspection service. Often, they will even offer discounts for using the service. Should you go with the discounted service offered by the seller?

Sure, the discount can be good, but you could potentially be setting yourself up for a big loss in the future. To understand why, first understand that the real estate agent has a pretty big commission on the line. Real estate agents often make 6 to 8 percent of the total sale. This means they have a lot riding on every sale and they are looking to close out every deal they can. While ethics should drive them to be fair in every sale, the sad reality is they are looking after the seller and their commission, not you. Hardly a surprising statement, eh?

Home inspection services recommended by the agent often carry an unspoken agreement. If the inspection reports are favorable to the seller, the inspector will get more business. If they are not, the seller’s agent will find someone else for future deals. Human nature suggests this situation can lead to certain deficiencies being overlooked by the home inspector, a fact you will inevitably pay for in the future.

The bottom line is that you, as a buyer, need to be aware of the importance of objective home inspections. The inspection is going to tell you if there are any problems with your potential dream home. If there are, you can demand the seller have them repaired, lower the price or pay cash funds at closing so you can have it done. If you use an inspector recommended by the seller or seller’s agent, you run the risk of missing some major problem with the property. Don’t do it!