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Closing Costs
Closing Costs, also called settlement costs, are the costs of the sale, charged to either the buyer or the seller depending on the type of cost. Local custom usually dictates how these charges will be divided unless the buyer and seller negotiate otherwise. Sometimes the lender will specify who is to pay certain costs, particularly with FHA or VA loans.
When someone wants to get technical with you, they might start talking about recurring closing costs and nonrecurring closing costs:
- Nonrecurring costs are one-time charges and fees.
- Recurring costs are costs which will occur at the time of the sale, but will also occur in the future, such as real estate taxes, or interest on the loan.
Who pays what is always negotiable between the buyer and the seller. But there are customs typically followed in each county. In Contra Costa County:
The SELLER will generally be expected to pay for:
- Real Estate Commission Documentation preparation
- Deed Document recording fee
- County Transfer Tax
- Loan fees required by the buyer's lender
- Notary Fees
- Any city transfer/conveyance tax
- Special courier/delivery fees
- Payoff of all loans in the sellers name
- Interest accrued to the old lender
- Lender payoff fees
- Homeowner's Association transfer fee
- Prorated share of homeowners dues
- Bonds or assessments (per the sales contract)
- Termite inspection and Section I repairs
- Natural Hazards Disclosure report
- Home warranty
- Any delinquent taxes
- Any judgment, tax liens, etc. against the seller
- Prorated share of the property taxes
- Recording charges to clear all documents of record against the seller
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The BUYER will generally be expected to pay for:
- Title insurance premiums
- Escrow fees
- Notary fees
- Document preparation fees
- Document recording fees
- Prorated share of the property taxes
- Buyer ordered inspections (roof inspection, property inspection, etc.)
- Special deliver/courier fees
- All new loan charges (except those required by lender for seller to pay)
- Interest on new loan from date of funding to 30 days prior to first payment date
- Fire insurance premium for the first year
- Preliminary change of ownership fee
- Assumption/change of record fees for takeover of an existing loan
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