What the heck are Closing Costs?

These can be a surprise to both Buyer’s and Seller’s when they get into a transaction. It’s so important to know what exactly to expect before you decide to buy or sell a house! Here I am, to make things just a little more simple for ya.

Seller’s

I surely don’t want your bottom line affected when you decide to sell your home. So let’s get you budgeting correctly and break down what exactly you’re (commonly) responsible for when it comes to closing costs.

In Huntington Beach, and Orange County in general, sellers should expect to pay between 6%-8% of the sales price towards closing costs. For example, a home priced at $850,000 can expect to pay roughly $60,000 in closing costs. Remember, this is including your Agent, and the Buyers Agent’s commissions! If you have equity in the home, these fees will be deducted from your proceeds.

A few helpful tips:

Meet with me and we will discuss what your homes value is. Additionally, I will provide you with a Seller Net Sheet that will breakdown your closing costs and give you the net result of the sale.
Understand items and fees typically paid for by Sellers in our market.
Expect the unexpected! For example, you may think your home is flawless, and maybe it’s pretty dang close! Remember, a buyer will more than likely get a home inspection that could reveal some underlying issues. In a case like this, to keep the deal together you might consider helping with closing costs to off set the cost of repairs.

Buyer’s

This is a real shocker for a lot of first time buyers. You’re constantly seeing and hearing that you can buy a home with as little as 3.5% down and once you have that save you may think you’re in the clear! I don’t mean to be the bearer of bad news, but I don’t want you to be prepared!

While Sellers are responsible for most of the costs associated with the transaction, as a Buyer, you still have some costs to pay for. Closing costs for Buyers are generally between 2%-3%. We’ll use the same example as we did for the Seller’s. On a home priced at $850,000, you should expect to pay roughly $17,000 in closing costs.

Some pointers for Buyers

When we meet, I’ll provide you with a Buyer Costs sheet. This will have estimates of all the costs and fees that you (as a Buyer) are generally responsible for. This way you have an idea of the true costs to buying a home.
Decide your budget. Between, you, me and your lender, we’ll figure out exactly what you can afford, what costs will be associated with that and at what price you’ll be comfortable buying.
Finally, hope for the best but prepare for the worst! There have been times where I have successfully negotiated a Seller to pay for my clients closing costs. This does involve rolling the closing costs into the price of the home and would equate to a higher monthly payment. Additionally, in the current Seller’s Market we’re in, this will make your offer look less appealing especially amongst a multiple offer situation.

At this point, you may be convinced that you may need some guidance. You may also be thinking that you have no idea where to start… If you’re thinking about making a move, I can help guide you through the process. Just send me a message or text me. No pressure, no sales tactics, just the help and guidance that you need!