A real estate transaction will incur fees called “closing fees,” which is an out-of-pocket expense to the buyer and seller. Buyers typically pay 2-3% of the purchase price in closing fees. Example: a home buyer purchasing a $400,000 home will pay between $8,000-$12,000 in closing fees. Common closing fees are:

Borrower normally incurs an underwritng fee, appraisal fee, and credit report. Other miscellaneous may apply. 

Prepaid fees are not real costs but are payments in advance for property taxes, homeowner’s insurance and interest on the new home loan.

The escrow settlement fee is normally split 50-50 by buyer and seller in a real estate purchase. Buyer, if purchasing with a home loan, will also incur a loan-tie-in fee, which is to compensate escrow the additional work required to process a new loan.  Messenger fee and wire fee will also apply. 

The owner’s title insurance  is customarily paid by the seller. However, buyer, if purchasing property with a home loan, will be required to pay for the lender’s title insurance. 

Transfer tax is customarily paid by the seller. Buy will be required to pay for mortgaage and deed recording. Fees on county recordings vary by county.