KNIEPER REAL ESTATE
Pam Knieper, Broker/Owner of Knieper Real Estate, is and has been the #1 Top Producer for more than 15 years in Hood County and running. She is known as the Waterfront Expert and the Authority on Real Estate.
Closing costs are a part of buying and selling Real Estate, there is no getting around it. The only questions are: How much, and who pays them?
For buyers the largest percentage of closing costs is almost always attributable to the “cost of borrowing money.” Loan origination fees, appraisal fees, underwriting fees, funding fees, pre-paid taxes and insurance, mortgagee title policy, and this is the short list…but not the only list.
There is a whole other list built into sales contracts that are not typically negotiable. For buyers, there are the cost of inspections, half of the title company escrow fee, wire fees, and recording fees.
Sellers, your list is longer and includes the other half of the escrow fee, document preparation fees, certified tax certificates, your pro-rated share of the property taxes, and REALTORS® commissions, if applicable.
List number 3 is items that are considered negotiable. The major items being the Owner’s Title Insurance Policy (not to be confused with the Mortgagee Policy), the cost of the survey, and the home warranty fee.
Cash buyers enjoy the shortest and most economical list of costs since they don’t have the “cost of borrowing money.” Interesting tidbit most people don’t realize; there is no financial advantage to sellers on a cash contract. Don’t get me wrong, sellers love cash contracts because they remove contingencies, like appraisals and loan approval. However, cash contracts save sellers exactly zero dollars in closing costs.
In Texas, the average closing costs for a buyer borrowing money is between 2-5% of the sales price. The largest single item is typically the loan origination fee which, for most lenders, is 1% of the loan amount. Pre-paid amounts for taxes and insurance to be deposited in your escrow account are another large expense. The good news is that when the tax or insurance bills comes due, your lender will be paying those bills for you out of that escrow account.
Sellers can expect to pay between 1-1.5% of the sales price in closing costs, with the largest single ticket item being the Owner’s Title Policy, which will almost always be less than 1% of the sales price. Title policy prices are regulated by the state of Texas. Also, don’t forget to add in your pro-rata share of the property taxes, and any REALTOR® commissions.
Buyers, almost every lender has a website with a closing cost calculator option. This is a great way to shop for the best fees and to be an “informed Consumer.” Also, lenders are required to give you a good faith estimate when you apply for a loan so that you know what to expect as you go through the process.
Sellers, I can’t speak for other REALTORS® but when we at Knieper Realty present a contract for consideration, we can always tell you what to expect in closing costs based on the offer.
Whether you are buying or selling, if you have questions, please give us a call at 817-219-0456 or visit us online at www.WeSellGranbury.com. We would love to talk with you.
pamK@knieperteam.com | 817-219-0456