CLOSING COSTS

The terminology used in closing costs is often confusing and, depending on the type of transaction (cash, conventional, VA), who pays the costs can change.  To help clarify some of this, the glossary below explains most of the terminology and the following charts identify which party typically pays which fees depending on the type of transaction.  When the buyer applies for a loan, a "Good Faith Estimate" will be issued by the lender along with a detailed explanatory booklet.

Appraisal Fee:  A one-time fee to pay an independent appraiser.  The appraiser is selected/assigned by the lender.

Credit Report Fee:  A one-time fee covering the cost of obtaining a current credit report.

Document Preparation Fee:  Depending on the transaction, there may be a separate fee covering the preparation of the final legal papers.

Homeowners Fee:  Some homeowners associations may require an up-front deposit or dues, as well as a fee to transfer their records from seller to buyer.  This transfer fee is typically split 50/50 in AZ.

In AZ homeowners associations are also required to disclose/certify their financial status to the state.  This disclosure/certification fee is, by law, paid by the seller.

Loan Discount Fee:  A one-time fee to adjust the yield on the loan to what market conditions demand (often referred to as "points").

Loan Origination Fee:  A one-time set-up fee charged by the lender for their administrative costs.

Escrow and Title Charges:  The title company will charge fees for the title policies, additional endorsements, recording fees, escrow and any additional services such as release tracking or special couriers.

PMI Premium:  Depending on the down payment, the buyer may have to pay an additional up-front fee for mortgage insurance.

Prepaid Interest:  This is a per diem charge that will be calculated depending on the time of the month the transaction closes.

Taxes & Hazard Insurance:  Property taxes will be brought current in escrow.  Depending on the month the transaction closes, the seller may be required to credit the buyer for property taxes which are due but not yet payable.  The buyer will have to pay a year's hazard insurance premium up-front and may be required to put a certain amount for taxes and insurance in a reserve account, which is held by the lender.

 

CASH TRANSACTIONS

Fees                                                   Seller Pays    Buyer Pays
Escrow Fees                                                          1/2                         1/2
Owners Title Policy                                                  $
Affidavit (A) & Recording Fees (D)                         A                            D
Home Warranty Premium Fee (Negotiable)              $                            $
Homeowners Association Transfer Fee                   1/2                          1/2
Homeowners Association Certification Fee               $
Termite Inspection                                                    $             or            $
Reconveyance/Release & Tracking Fees                   $
Prorated taxes and any taxes due                              $
Real Estate Professional's Commission                      $
Existing Loan Payoff                                                 $

FHA/VA NEW LOAN TRANSACTIONS

Fees                                                   Seller Pays    Buyer Pays
Escrow Fees  (pd entirely by Seller on VA loan)      1/2                         1/2
Owners Title Policy                                                  $
Lenders ALTA Policy                                                                            $
Affidavit (A) & Recording Fees (D)                         A                            D
Deed of Trust (DT)                                                                                DT
Home Warranty Premium Fee (Negotiable)              $                            $
Homeowners Association Transfer Fee                   1/2                          1/2
Homeowners Association Certification Fee               $
Termite Inspection                                                    $             or            $
Reconveyance/Release & Tracking Fees                   $
Prorated taxes and any taxes due                              $
Real Estate Professional's Commission                      $
Existing Loan Payoff                                                 $
1st Year Insurance Premium                                                                   $
Appraisal Fee (Negotiable)                                       $                            $
Lenders Documentation Preparation Fee                   $
Discount Points (Negotiable)                                     $                           $
Origination Fee (Negotiable)                                     $                           $
Tax Service                                                              $
Flood Certification                                                    $
Credit Report Fee                                                                                 $
Prepaid Interest                                                                                     $

NEW CONVENTIONAL LOAN TRANSACTIONS

Fees                                                   Seller Pays    Buyer Pays
Escrow Fees  (pd entirely by Seller on VA loan)      1/2                         1/2
Owners Title Policy                                                  $
Lenders ALTA Policy                                                                            $
Affidavit (A) & Recording Fees (D)                         A                            D
Deed of Trust (DT)                                                                                DT
Home Warranty Premium Fee (Negotiable)              $                            $
Homeowners Association Transfer Fee                   1/2                          1/2
Homeowners Association Certification Fee               $
Termite Inspection                                                    $             or            $
Reconveyance/Release & Tracking Fees                   $
Prorated taxes and any taxes due                              $
Real Estate Professional's Commission                      $
Existing Loan Payoff                                                 $
1st Year Insurance Premium                                                                   $
Tax Impounds                                                                                        $
Appraisal Fee                                                                                         $
Lenders Documentation Preparation Fee                                                $
Discount Points (Negotiable)                                     $                           $
Origination Fee                                                                                      $
Credit Report Fee                                                                                 $
Prepaid Interest                                                                                     $

ASSUMPTION TRANSACTIONS

Fees                                                   Seller Pays    Buyer Pays
Escrow Fees                                                          1/2                         1/2
Owners Title Policy                                                  $
Affidavit (A) & Recording Fees (D)                         A                            D
Home Warranty Premium Fee (Negotiable)              $                            $
Homeowners Association Transfer Fee                   1/2                         1/2
Homeowners Association Certification Fee               $
Termite Inspection                                                    $             or            $
Prorated Interest                                                       $
Prorated taxes and any taxes due                              $
Real Estate Professional's Commission                      $
Existing Loan Transfer Fee                                       1/2                        1/2
Interest through Close of Escrow                              $

NOTE:  The information provided above is given to provide a general understanding of costs and who is typically responsible for them.  Real Estate financing changes constantly in response to the marketplace, and may make these tables incorrect.

Information above provided by Security Title Agency (www.securitytitle.com)

 

    Contact us for a free market analysis of your home:      

                                              Teri@BoulterProperties.com