What Are Closing Costs?

Dated: March 1 2021

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When it comes to buying and selling real estate, you may have heard of closing costs, but what are they and how much will they be? Simply put, closing costs are the final expenses required to complete a real estate transaction and can vary in amount. 

Closing costs occur when the title of the property is transferred from the seller to the buyer and are typically 2-5% of the loan amount. The costs may include loan origination fees, discount points, underwriting, title searches, insurance, recording fees, etc. Lenders are required to estimate these costs and share them with the buyer within the first few days of a home loan application. Prior to closing, the lender will also provide a closing disclosure document that lays out all of the fees which may have changed slightly since the original estimate. Be sure to review these documents and speak up if you have any concerns. The closing costs must be agreed upon before the transaction can be completed.

While closing costs typically fall on the buyer, the home buying process is a negotiation and can be split between the buyer and seller as agreed upon in the paperwork. Having a REALTOR® on your side can make all the difference.

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Dawn Wild

Dawn Wild has always had a passion for real estate and is thrilled to be able to share it with others looking to buy or sell a home in Colorado. Originally from Vancouver, Canada, she relocated to Col....

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