Closing Costs Explained

• May 13th 2009

by Mark Wellborn

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When searching for a new home, most prospective buyers look at a property’s listing price as the total amount of money that they are going to have to shell out. Unfortunately, at settlement there are a handful of other fees that need to be paid.

Closing costs — fees you pay once you get a home loan — have always been a confusing part of the home buying process. The fees usually include taxes, lender and financing costs as well as attorney and other administrative fees. Closing costs generally range between 2 and 7 percent of the property value, and you must pay these costs before moving into your new home.

In a down market, the conventional wisdom is that buyers have a fair amount of negotiating room with these fees. Also, before finalizing, buyers should get at least three Good Faith Estimates from mortgage lenders. Below are some typical fees for the DC area.

• DC Transfer Tax (1.45 percent of sales price or 1.1 percent of sales price under $400K)
• Settlement Fee ($100-$500)
• Release Preparation Fee ($75-$150)
• Release Recording Fee ($50-$75 per lien)
• Messenger Fees ($50-$100)
• Lender Application Fee ($295)
• Title Search ($200)
• Title Insurance ($1,000-$4,000)
• Appraisal Fees ($300)
• Inspection ($385)
• Survey Fee ($250)
• Credit Report Fee ($55)
• Deferred Transportation Related Facilities Charges ($300-$500)
• Well or Septic Certification Fees ($200-$500)
• Home Buyer’s Warranty ($300-$600)

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/closing_costs_explained/905.