You hear a lot about down payments when you're buying a home (unless you're using a VA loan), but nobody seems to talk about closing costs which are a component of the home purchase process in Anne Arundel County and the Fort Meade MD real estate market.
Before you start looking at homes you'll want to know what closing costs are, how much they are for your home purchase price range and who pays them.
What Are Closing Costs?
Closing costs are expenses and fees related to the purchase and settlement of your home loan. They are payments for the professionals handling the settlement of your real estate loan including , your appraiser and surveyor, lender fees, attorney fees, title insurance which is optional but recommended as it protects your investment with insurance against any claims to your title that may come to light after the sale, title review to make sure you are purchasing a property with a clear title, state and local transfer taxes, and more as detailed below. I've used a home purchase price of $680,000 for my example here and highlighted each expense that makes up your total closing costs of $13,934. These fees vary by location and home price and those shown below are specific to Anne Arundel County, MD. These are buyer expenses that are not included in your financing and must be paid by the buyer, or seller, or a combination of both on or before the date of your settlement.
A special thank you to Pete O'Donnell at Main Street Home Loans for providing the information below. You can reach Pete anytime for financing questions at (410) 299-2043 or visit him on line to complete a loan application from the comfort of your own home.
If you have questions about title services and fees we highly recommend Rachel Forame at Turnkey Title, LLC to answer all of your questions and to handle the settlement of your home.
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Who Pays For Closing Costs?
Well, for the past few years it was almost unheard of for sellers to pay buyer closing costs due to the high demand for homes and low inventory. However, as of Spring 2023 we are seeing closing cost assistance popping back up again in real estate transactions with as many as 40% of recent transactions having some amount of seller closing help. You'll want to work with a pro who understands what's going on in your real estate market right now to know when and if closing cost help is an option for your offer.
Using a round number of $14,000 for the total closing costs needed on a $680,000 real estate purchase in Anne Arundel county, you could ask the seller to pay all, half, or another amount of your choosing. Or, if you've saved up enough money to cover these costs, you can make your offer more competitive by paying all closing costs yourself. This is sometime necessary on the hottest homes to make you competitive. But, like everything else in real estate offers, the terms of your offer are determined by you with the expert guidance of your trusted real estate agent.
Bottom Line
When it comes to buying a home, it’s important to understand all of the financial components of your purchase including closing costs. Connect with The Roskelly Team and we'll guide you through the homebuying process with ease!
