How to Calculate Closing Costs When Paying Cash for a Home

This article was updated on April 7, 2016.

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. Furthermore, there can be a big difference in closing costs depending on whether you're financing, or if you're paying cash for a home, as there are a number of mortgage-related costs that cash buyers can avoid altogether. 

Here's a list of common closing costs that cash buyers may be required to pay:

• Appraisal.
• Property inspection.
• Title insurance. 
• Survey.
• Escrow fees and bank transfer fees to fund escrow. 
• Notary. 
• 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.

Some of these fees may or may not apply, depending on your locale, including appraisals, inspections, and title insurance. But just because they aren't required (they're often only required by a lender, not any laws), that doesn't mean you should automatically skip them, particularly things like property inspections which can end up saving you much more than their cost if you're not a seasoned property buyer. 

Furthermore, the seller may be willing to pay some or all of these fees, and in many locales 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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