Who Pays Closing Costs ?
If you are taking a mortgage to buy a new house, you will definitely want to know who pays the closing costs for the mortgage. Unfortunately, there is no fixed rule as to who pays the costs. This depends on the market and the location. Also, different states and cities have different requirements. For instance, in Los Angeles, the title insurance costs are paid by the seller, whereas in San Francisco the buyer has to bear the burden. Hence, who pays the closing costs is not uniform across the US.
It has been seen that when there is a buyer's market, it is the seller who will volunteer to pay the closing costs. This is normally done to ensure that the seller gets the price he or she is anticipating.
When a buyer wants to buy a house, he or she should have the 20 percent down payment. In addition, the buyer should also have money to cover the closing costs in order to close the mortgage and get access to the money. Many costs go on to make up the closing costs.
When the closing costs are shared between the buyer and the seller, they decide which costs each one will bear. Usually, the buyer bears the burden for documentation fees, inspection costs, homeowner's insurance, property taxes, cost of transferring the title, title insurance, settlement fees and any fees paid to a lawyer. At times, the title transfer cost can be shared by the buyer and the seller.
When buying a house, a real estate agent usually informs the person what are the closing costs that he or she would have to bear. When this happens, the buyer does not get a surprise towards the end of the deal. Sometimes, if a buyer does not know the closing costs, he will not have the required amount of money to pay when closing the deal and this will cause him to lose the house.
The seller is expected to the closing costs such as loan pay off fees, commission on real estate, repairs for termite, transfer taxes, settlement fees, transfer insurance and lawyer fee if necessary.
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