The average price of houses sold in 2022 is $428,700. Depending on where you’re looking to buy a new home, it can be extremely pricey!
If you’re about to find the perfect home with your significant other, partner, or friend, there are a lot of expenses that you, and whoever you’re buying the home with will incur. This can include the cost of moving, down payments, and closing costs.
Not sure who pays closing costs on a house? We have everything you need to know about how these costs work, who covers them, and how to save money!
Here’s everything you need to know about closing costs on a house.
How Much Are Closing Costs?
Closing costs can vary greatly depending on several factors, but typically they range from 2-5% of the purchase price. So, for a $200,000 home, you could be looking at $4,000-$10,000 in closing costs.
Some of the biggest factors that affect closing costs are the type of loan you get, the lender you use, and the location of the property. Ultimately, it’s important to talk to your lender and real estate agent to get a better estimate of what you can expect to pay in closing costs.
Who Pays Closing Costs on a House?
Most of the time, the seller pays the bulk of the closing costs on a house. This includes the real estate commission, which is typically around 6% of the home’s sale price. The buyer usually pays for the home inspection, any appraisal fees, and any loan origination and/or tax service fees.
The title insurance policy is usually split between the buyer and seller, with the buyer paying for the lender’s policy and the seller paying for the owner’s policy. Any remaining costs are typically split evenly between the buyer and seller. You can go here for more info.
How to Negotiate Who Pays Closing Costs
When it comes to negotiating who pays closing costs, there are a few things you can do to increase your chances of getting the seller to pay. First, start by asking for a seller concession in your offer. This is an amount of money that the seller agrees to pay towards your closing costs.
If the seller is unwilling to do this, you can try asking for a reduction in the purchase price. This means that you would pay less for the home overall, but you would be responsible for your closing costs.
Finally, if the seller is still unwilling to budge, you can ask them to pay for specific closing costs, such as the appraisal or the home inspection. Remember that you’ll need to be firm but fair in your negotiations. You should also be prepared to walk away if the seller isn’t willing to meet your needs.
The Costs are Usually Split
Who pays closing costs on a house? Both the buyer and the seller typically pay closing costs, but it is possible to get the seller to agree to pay a larger portion or even all of the closing costs. As a general rule of thumb, the person who is paying the most money for the house should pay the majority of the closing costs.
Found this article helpful? Don’t forget to check out our other blog posts for more real estate guides and insights!