There are a lot of fees that will be assessed before and during a closing. These fees could be paid by either the Buyer or Seller, depending on prior negotiations or state law requirements, but typically most of it is paid by the Buyer. Following is a representation of most of the fees charged in connection with purchasing property, but it is not a meant to be considered a comprehensive list.
- Lender Fees/Mortgage Fees and Points – this amount can vary with each lender. Typical charges include application fees, credit report fees, and origination fees. There are no fees in cash transactions.
- Title Insurance Fees – the various components of title insurance include the Owner’s policy, the Lender’s policy, a lien search, a title exam, closing endorsements, and estoppel fees.
The fee for the Owner’s policy is based on the amount of the purchase price – there is a fee of $575.00 up to the first $100,000 and thereafter a fee of $5.00 for every $1,000 over the first $100,000. So, if you purchase a home for $120,000 the Owner’s policy will cost $675.
The fee on the Lender’s policy can be anywhere from $100 to $200 (not needed on cash transactions). Lien search fee can be between $150 and $250. Other fees mentioned above should not exceed $500.
- Recording Fees (Deed and Mortgage) – it is $10 to record the first page and $8.50 for each additional page.
- Documentary Stamps and Fees – on all deeds and other instruments relating to real property or an interest in real property, a fee of .70₵ is charged for each $100 of value paid, also known as consideration (Seller typically pays this unless the Seller is Fannie Mae or Freddie Mac); on all mortgages, a fee of 35₵ is charged for each $100 of the mortgage amount; and there is an intangible tax charged in the amount of 20₵ for each $100 of consideration.
- Brokerage Fee – $100 on properties $100,000 or less, and $195 on properties over $100,000 (This pertains to RE/MAX Alliance Group only — other Brokerage Fees can be higher).
- Survey – typical cost of a survey on residential property should not exceed $500. If a Flood Certification is needed, an additional charge of $75 to $150 will be added.
- Home Inspection, Wind Mitigation and Four Point Inspection – the charge for a home inspection on a single family residence is often based on the square footage of the home. For a home that is 2,000 square feet or less, the cost is approximately $350. However, you must add to that the cost of a wind mitigation report and a four point inspection report, both of which will be required by homeowner’s insurance companies – the cost of each report is between $75 and $100 each.
- Pest Inspection Report – typical cost is $50 to $75.
- Appraisal Fee – always required when a mortgage is needed, and can cost anywhere from $300 to $500.
- Homeowner’s Insurance – must pay 1 year’s premium upfront on or before closing whether or not you have a mortgage. If you have a mortgage, in addition to the pre-payment, an amount equal to 1/12 of the annual premium will be calculated for a lender required escrow account, and a portion may be included in the closing costs. Cost of homeowner’s insurance varies depending on the location of the property (is it in a high risk flood zone?), the construction of the property (premiums on masonry block homes is typically less than premiums on wood frame homes), the age of the roof, the age of the windows, etc.
- Property Taxes – if you acquire a mortgage, a portion of the property taxes will be collected at closing to be placed in your lender required escrow account.
Provided By: Dianne Johns, RE/MAX Alliance Group