Question: What are closing costs?

Answer: Closing, or settlement, costs are expenses over and above the price of the property . Both the buyer and seller incur some of these expenses when transferring ownership of a property . Who actually pays, however, often depends on local custom and what the buyer or seller negotiates. Closing costs normally include title insurance, loan points, title & escrow or closing day charges, property taxes, and document fees. The lender provides an estimate of closing costs for prospective homebuyers.

Question: Is it possible to save on closing costs?

Answer: Certainly, once you get pass the sticker shock. Closing costs are expensive. They can average between 2 to 3 percent of the total home purchase price. But here are a few ways to save:

• Haggle with the seller. He may pay all or part of the closing costs.
• Nab a no-point loan. You may have to pay a higher interest rate, but if you are strapped for cash and can qualify for a higher interest rate, you may find this type of loan can significantly reduce your closing costs.
• Grab a no-fee loan. Although the fee is usually wrapped into a higher rate loan, it does offer one advantage ? you get to save on the amount of cash you would need up-front.
• Secure seller financing. These loans typically avoid the traditional fees or charges imposed by lenders.
• Shop 'til you drop for the best deal. Every lender has its own unique fee structure; you are bound to find one that works for you.

Question: Is there anything I should know about closing day?

Answer:  Yes. The following to-do list can help save you a few headaches and keep the closing on track:

• Keep extra money in your account. Something unexpected can pop up during the closing that will require more money out of your pocket. Take your checkbook. Even better, find out how much you will need to pay and write a certified check for the total amount.
• Take your loan commitment letter. Use it to verify loan approval in case of a mistake or misunderstanding with the lender.
• Take your contract to purchase . Pull it out if something a little suspicious comes up.
• Take your personal ID. A driver?s license or other personal identification will due.
• Do a before-closing inspection. It is always a good idea, when possible, to walk through the property to make a list of any problems.
• Utilities. Arrange in advance to have the water and electric meters read on closing day and the service switched to your name to prevent interrupted service. The same applies for the fuel tank.

Who Pays What?

The BUYER can generally be expected to pay for:

• Title Insurance premiums (ALTA Loan Policy)
• Escrow Fee (50%)
• Document preparation (if applicable)
• Notary Fees
• Recording changes for all documents in Buyer's names
• Termite Inspection (according to contract)
• Tax pro-ration (for date of acquisition)
• Homeowner's Transfer Fee
• All new loans charges (except those required by Lender for Seller to pay)
• Assumption/ Change of Records Fees for takeover of existing loan
• Beneficiary Statement Fee for assumption of existing loan
• Inspection Fees (roofing, property inspection, geological, etc.)
• Home Warranty (according to contract)
• City Transfer/Conveyance Tax (according to contract)
• Fire Insurance Premium for first year
• Buyer's portion of Sub-Escrow Fee
• Escrow Loan Tie-In Fee

The SELLER can generally be expected to pay for:

• Standard CL T A owner's Title Insurance
• Real Estate Commission
• Document preparation fee for Deed
• Documentary transfer tax ($1.10 per $1,000.00 of sales price)
• Any City Transfer/Conveyance tax (according to contract)
• Any FHA or V A loan fees required by Buyer's Lender
• Payoff of all loans in Seller's name (or existing loan balance if being assumed by Buyer)
• Interest accrued to Lender paid off, Statement Fees, Reconveyance Fees and any Prepayment Penalties
• Termite Inspection (according to contract)
• Termite Work (according to contract)
• Home Warranty (according to contract)
• Any judgement, tax liens, etc. against the Seller
• Recording charges to clear all documents of record against Seller
• Tax pro-ration (for any taxes unpaid at time of transfer of title )
• Any unpaid Homeowner's dues
• Any bonds or assessments (according to contract)
• Any and all delinquent taxes
• Notary Fees
• Escrow Fee (50%)
• Seller's portion of Sub-Escrow Fee
• Demand Fees