Closing costs are the fees paid to finalize a real estate sale. Escrow is a neutral process that holds funds and documents until all conditions are met.
Typical costs for buyers
- Loan origination and underwriting fees.
- Appraisal and inspection.
- Title search and insurance.
- Recording fees and transfer taxes where applicable.
- Prepaid taxes, insurance and interest.
Typical costs for sellers
- Real estate agent commissions.
- Transfer taxes in some places.
- Payoff of existing mortgage and liens.
- Prorated property taxes.
The Closing Disclosure
Lenders must give buyers a Closing Disclosure at least three business days before closing. Compare it to your Loan Estimate and ask questions about differences. Some changes can restart the waiting period.
Closing day
- Do a final walkthrough.
- Bring identification and certified funds as instructed, or wire only to verified accounts. Wire fraud is common, so call to verify instructions.
- Review documents before signing.
- Get copies of everything.
Frequently asked questions
Can closing costs be negotiated?
Some can, and sellers may agree to credits.
What is an escrow account for taxes?
Your lender may collect monthly funds to pay property taxes and insurance.