Below, our friends from Hayhurst Law PLLC explain closing costs and the importance of understanding them.
Avoiding Surprises On The Day You Get Your Keys
Many first-time homebuyers focus so much on saving for the down payment that they forget about another big expense — closing costs. These are the fees and expenses you must pay when the deal is finalized. If you are not prepared for them, they can be a shock. Planning ahead ensures you can walk into closing day confident and ready.
What Are Closing Costs?
Closing costs are the various expenses you pay to complete the legal transfer of the home from the seller to you. They typically range from two to five percent of the purchase price. That means if you are buying a $200,000 home, you could expect to pay anywhere from $4,000 to $10,000 in closing costs.
These costs are not a single fee. Instead, they are a combination of services, taxes, and insurance that make sure the transaction is legal, secure, and recorded properly.
Common Closing Costs Include:
- Loan origination fees charged by your lender
- Title search and title insurance to ensure the seller truly owns the property and there are no liens
- Appraisal fees to confirm the home’s value matches the purchase price
- Home inspection fees for a professional evaluation of the property’s condition
- Recording fees for legal documents filed with the county
- Attorney fees for reviewing contracts and protecting your legal interests
- Prepaid property taxes and homeowner’s insurance to cover the first months of ownership
Why You Need To Plan For Them
If you do not set aside money for closing costs early, you might find yourself scrambling for funds at the last minute. Your lender will provide an initial estimate early in the process, but it is important to remember that these numbers can change before closing. By working with a wrongful termination lawyer who is also a licensed real estate attorney, you can get a better understanding of which costs are fixed and which could increase.
Can You Negotiate Closing Costs?
Some closing costs are set in stone, but others are open to negotiation. You can:
Ask the seller to pay a portion of your closing costs as part of your offer
Shop around for services like title insurance or the home inspection
Compare multiple lenders to find the best fee structures
Review your settlement statement closely to make sure there are no duplicate or unnecessary charges
Negotiating may not eliminate all costs, but even small reductions can save you hundreds of dollars.
How A Real Estate Attorney Helps
A real estate attorney can be one of your best resources during this stage. They can review your closing disclosure, explain each fee in plain language, and make sure you are not paying for services you do not need. They can also help you negotiate certain costs or ensure the seller pays the fees they agreed to cover. Most importantly, they protect your legal rights so the transaction is fair and above board.
Plan Early
Once your offer is accepted, start budgeting for closing costs immediately. Keep in regular contact with your lender and attorney so you are never surprised by last-minute changes. Having the funds ready will allow you to focus on the excitement of becoming a homeowner rather than worrying about an unexpected bill.
Closing costs are a normal part of buying a home, but they should never come as a surprise. By understanding them early, planning ahead, and working with a trusted real estate attorney, you can show up to closing day prepared. That means you can sign the papers, grab your keys, and start your new chapter with confidence.
Disclaimer: This content should not be construed as legal advice.
