Who Pays What?

Now that we know more about the closing costs, it’s logical to begin wondering who pays what? Of course, there are more than closing costs to consider. “Who pays what” is dictated by the traditions and practices in each area and varies from state to state, and even county to county. FHA and VA loans may also have some differing rules and procedures.

Below is a general guide to fees and services that may be required. Remember, many items in the real estate contract are negotiable.

Seller

  • Real estate commission as specified in listing agreement or sales contract
  • Any applicable city, county, or real estate transfer taxes
  • Payoff of all loans in seller’s name including: Principal balance plus interest; any demand, reconveyance or other fees; prepayment penalties and preparation of documents
  • Any judgments, tax liens, etc. against the seller
  • Any unpaid property tax amount at time of transfer
  • Any unpaid homeowner association dues
  • Any bonds of assessments (if specified in contract)
  • Any delinquent taxes
  • Termite inspection and/or work (if specified in contract)
  • Home warranty (if specified in contract)
  • Notary fees, if applicable
  • One-half of the escrow or sub-escrow fees (if customary in your area)
  • Title insurance premium (if customary in your area)
  • Recording charges to clear all documents of record against seller

Buyer

  • Real estate commission as specified in listing agreement or purchase contract
  • Loan charges as required by lender, including: Any loan origination fees or funding fees; preparation of documents; credit report, pre-paid interest, and appraisal fee
  • Impounds for taxes and fire insurance (as required by lender)
  • Termite inspection and/or work (if specified in contract)
  • Other inspection fees (if specified in contract or required by lender)
  • Home warranty (if specified in contract)
  • Any applicable city, county, or real property transfer taxes (as specified in contract)
  • Title insurance premium (if customary in your area)
  • Lender’s title insurance premium and endorsement fees as required by lender
  • One-half of escrow or sub-escrow fees (if customary in your area)
  • Recording charges for all documents in buyer’s name

Your escrow officer is one of the best sources of information specific to your area and your circumstances.