When entering into a purchase and sale agreement, the parties agree on who will bear what costs. Buyer’s closing costs typically include attorney or title company fees, general property insurance, registry and court fees. Without a mortgage, these are around 1-2% of the transaction amount.
A broker’s fees cost 4-6% of the property price and are usually paid by the seller. The seller is also usually responsible for the transfer tax (0.01-2.00% of the transaction amount).
Home Inspection
An inspection is not required by law, but it is usually recommended to arrange one. The cost for a small property is $300-500.
Mortgage
When buying with a mortgage, be prepared for a number of additional expenses. You may need:
- Independent home appraisal – $250-600;
- Opening an escrow account – $40;
- loan issuance fee – about 0.5% of the loan amount;
- mortgage insurance (used in cases where the down payment is less than 20%) – 0.55–2.25% of the purchase price;
- mortgage broker commission – 0.50–2.75% of the property price;
- title insurance (not always required) – 0.5–1.0% of the purchase price;
- real estate insurance – from 1% of the property price per year.
About property insurance
Real estate is insured at your own discretion, but in some cases insurance is required by the terms of the transaction. First of all, this applies to mortgages.
The cost of insurance ranges from 1 to 5% per year of the property price and depends on many factors (for example, whether there is water nearby and the risk of flooding).
Lawyer’s fee
A mandatory expense item. Rates usually range from $1,000 to $1,500.
Notary Fee
A notary is not required in the US, as every lawyer has the right to certify documents.
Translator Fee
If the buyer does not know English, then all documents (the offer to purchase and the contract) must be translated by a certified specialist. The cost of translation is about $20 per page.
Duties and Fees
Usually, when buying real estate, you pay:
a fee for checking the title – about $200;
real estate taxes to the city and county for two months – their general rate for the year is 1-2% of the value of the property.