Even experienced homeowners sometimes forget how challenging the home buying and selling process can be. Even the best real estate deal can take a toll on your finances through closing costs.
Closing costs are the processing fees owed to a lender. These lenders charge closing costs in exchange for lending the money they provided you.
How much do people pay in closing costs? Generally, these fees can comprise 3%-6% of the final loan amount. A mortgage of $150,000 could cost between $4,500 and $9,000.
Homeowners often wonder, "do sellers usually pay closing costs?" If that's your question, keep reading! Our guide will answer this question and others so you can navigate the home selling process with less stress.
Home Buying Costs
The answer to who pays closing costs is "both parties." However, the buyer and seller typically pay for different facets of this process.
First, let's discuss what home buyers pay for. Generally, buyers pay for fees associated with the mortgage process.
These amount to three primary fees:
- mortgage costs
- property costs
- insurance fees
We'll discuss these in more depth, starting with mortgage costs.
Any fee associated with the mortgage process becomes the buyer's responsibility. Home buyers receive a closing disclosure three days before closing that breaks down all associated mortgage loan costs. You can find samples of these forms online to see what costs Phoenix properties include.
Buyers also pay for home appraisals and inspections. Lenders require appraisals to ensure they provide you with enough money for the house and not too much.
Property taxes also comprise some of these costs. However, property taxes come prorated; you'll only pay the taxes for the portion of the year that you owned the property.
Finally, buyers with less than a 20% down payment usually pay private mortgage insurance. These policies require an upfront annual premium charge.
Finally, buyers will pay for title insurance to protect themselves against rival claims. This insurance also covers the mortgage lender.
Do Sellers Usually Pay Closing Costs?
Sellers have fewer overall expenses to pay at closing. However, the current homeowner pays more than home buyers at the closing.
Home selling costs usually include real estate commissions for both parties' agents. This figure amounts to three percent of the total purchase for each agent.
Furthermore, sellers often pay for the buyer's title insurance policy. If they haven't paid their property taxes yet, they may need to pay the buyer for those, too.
Work With Us to Sell Your House
The answer to "do sellers usually pay closing costs?" can be complex. Selling a home can be much more challenging than owning a home!
Fortunately, you can simplify this process when you work with a home buyer and selling service like ours! We can help you navigate this process and sell your house fast.
In doing so, we ensure you receive the cash you need for your house. We've served many homeowners in the Phoenix, Arizona, area and look forward to serving you! So, start your home selling process by selling with us today.