Ben Franklin said that only death and taxes are certain, but closing costs surely had to come close to making that list. And depending on where you live, there are different items that may or may not fall on the list of closing costs. If you're paying cash for a home, the good news is there are a number of costs that are related to a mortgage that you can avoid altogether.
Here's a list of common closing costs that cash buyers may be required to pay, and a few they should at least consider even if the services aren't required:
- Property inspection.
- Title insurance.
- Escrow fees and bank transfer fees to fund escrow.
- Taxes, such as property tax.
- Local, county, and state government fees.
- Attorneys fees.
- Homeowners insurance premium.
Many of these fees are fixed costs, such as home inspections, appraisals, and notary, fees while others, such as taxes, escrow, and insurance premiums, will be based on the property value or the selling price. Other fees, such as attorney's fees, can also vary, depending on location and the extent of the services the buyer requires. Again, some of these fees may or may not apply, depending on your locale.
The good news is that the seller may be willing to pay some or all of these fees, and in many areas it may be a normal practice for buyers and sellers to split certain costs. It's also important to note that your actual closing costs will vary from one locale to the next, and that your real estate professional should be able to give you a list of costs for the property you're buying.
When it comes to things such as appraisal, survey, and property inspection, it's worth shopping around, just as you would with your insurance. You may be able to save a few bucks here or there, but it's probably more important to consider the quality and reputation of the professional you hire as much as saving money. After all, paying a little more for a home inspector who catches a major problem before you pull the trigger is as good as money in the bank.
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