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Closing Costs

What are closing costs?

The bundle of fees associated with buying or selling homes are called closing costs. Certain fees are automatically assigned to either the buyer or the seller; other or additional cots are either negotiable or dictated by local custom.

Many buyers that are new to the home buying process are unaware of the additional costs that are incurred when closing a real estate transaction. Many believe the 5% down payment is the only funds they require to purchase a home. And more often than not, they are scrambling at the end of the transaction to find enough money to cover the unexpected and often unexplained closing costs.

Buyer Closing Costs

When a buyer applies for a loan, lenders are required to provide them with a good estimate of how much their closing costs are going to amount to. The problem is if the buyer has not been in to see a lender, they will have no idea that there are closing costs at all. Not to mention the estimated amount of extra funds they will require.

This is just one of many good reasons why many buyers should be pre-approved prior to house hunting.

Some typical buyer closing costs include:

- The down payment (usually 5% of the purchase price)

- Loan fees (points, application fee, credit repayment, etc.)

- Prepaid Interest

- Inspection fees

- Appraisal fees

- Mortgage insurance

- Title insurance

- Legal fees

- Provincial Land Tax (if applicable)

- Home Insurance

Keep in mind moving costs, household appliances, and window coverings may need to be addressed as well.

Seller's closing costs:

-    Any and all outstanding mortgage fees and penalties

-    Transfer taxes (if applicable)

-    Legal fees

-    Title insurance

-    Property Taxes

-    Any and all loans or charges against the property

Your bank or lawyer should be able to help you determine what amount you personally need to cover closing cost on the sale or purchase of your home.

For more detailed information on Buying a For Sale By Owner (FSBO) Listed Home or any other listing, Check out our comprehensive Buyers Guide Ebook