Buying a house requires a significant financial investment — one in which many prospective buyers aren’t fully aware of. The two elements that receive the most focus are the mortgage calculations and the down payment. Although it’s wise to determine how much home you can afford before you begin your search, it’s easy to forget about the other costs associated with the transaction. Budgeting for closing costs is a key aspect of your overall budget for buying a house.
What are Closing Costs?nn
Who is Responsible for Closing Costs?
Many of these fees, such as appraisal, inspection, and application fees, are the responsibility of the buyer. Others, including title search & insurance, transfer taxes, and broker fees, are traditionally the responsibility of the seller. Thankfully, some of these costs can be negotiated between the seller and buyer. Certain fees may even be negotiated or reduced by speaking with the lender. The best way to prepare for these varying costs is to assume that your budget should include a two to five percent increase to cover these costs.
Although you may or may not be responsible for all these fees when buying a house, having the funds available is the most responsible way to proceed. When negotiating these fees, confide in your real estate agent and let them advise you on how to approach the negotiations as amicably and respectfully as possible.