What Are Closing Costs?
When you decide to buy a new home, it’s not an overnight transaction. It takes a lot of planning, saving, and decision-making. Not only do you need to consider what your budget is, but what you’re looking for as well. Are you looking for a small house in the city? A large house in the suburbs? An open kitchen, wood floor, or renovated bathrooms? These are all questions that you have to take into consideration before you make a decision. When you find the perfect house, you’ll probably want to move in as soon as possible. Aside from signing a contract, there’s one more thing you’ll need to consider: closing costs.
So, what exactly are closing costs? Closing costs are fees paid at the end of a real estate transaction. There are different fees that make up the closing cost. For instance, you’ll have to pay for a title search. This is when lenders send someone to search local property records to make sure there aren’t any issues with ownership or liens. Other fees include: appraisal fees, credit report fee, origination fee, application fee, title insurance, and underwriting fees.
Since there are many fees included in the closing cost, it’s important to be prepared for this payment. The overall payment of closing costs is usually around 2 to 5 percent of the purchase price of the home. While most fees will be paid by the buyer, some can be negotiated. This is important to remember, as your New York real estate attorney will play an important role during the negotiation. For instance, there are many cases where the New York real estate attorney is able to persuade the seller to share some of the payments, such as tax and insurance escrow deposits, flood and hazard insurance premiums, property taxes, and more.
Buying a home is expensive, so it’s important that the buyer understands and negotiates their purchase agreement. For assistance during this process, make sure to hire a New York real estate lawyer.