Closing cost can cost the homebuyer around 3.5% of the purchase price, but it is not mandatory for the seller to pay closing cost for the home buyer.
Often times the first time home buyer has the thought that it is customary for the seller to pay for all or a minimum of 3% of the total closing cost. Home buyer closing cost will consist mostly of mortgage fees such as:
- Origination fees (usually 1% of price and any points)
- Appraisal fees
- Insurance Premiums
- Home inspection
I have to blame this myth on the actual real estate agents that tell the virgin buyer “don’t worry, the seller usually pays that”. In actuality, the seller based on lender rules must pay some fees, although others are only by contract bases:
- Transfer fees
- Title Fees
- Property Tax (Partial)
- Pay off the existing mortgages and other hindrances tied to the house
- Attorney costs
- Real Estate Commissions
- Termite Inspection
Looking at the difference in the type of fees that make up the closing costs, what would you think is fair for the seller to pay for the home buyers’ closing costs?