Closing Costs

Closing Costs

The fees associated with buying or selling real estate in Palos Verdes are called closing costs. Certain fees are automatically assigned to either the buyer or the seller; other costs are either negotiable or dictated by local custom.

Seller closing costs
If the seller has not yet paid for the house in full, the seller’s most important closing cost is satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will contact the seller’s lender to verify the amount needed to close out the loan. Then the original loan will be paid at the closing before the seller receives any proceeds from the sale. Other seller closing costs include:

• Title insurance
• Broker’s commission
• Property taxes (prorated)
• Transfer taxes
• Documentary Stamps on the Deed

Buyer closing costs
When a buyer applies for a loan, lenders are required to provide an estimate of their closing costs. The fees vary based on several factors, including the type of loan they applied for and the terms of the purchase agreement. Some of the closing costs, especially those associated with the loan application, are paid in advance. Some typical buyer closing costs include:

• The down payment
• Loan fees
• Inspection fees
• Prepaid interest
• Appraisal
• Title insurance
• Mortgage insurance (typically 1 years premium plus an escrow of 2 months)
• Hazard insurance (typically 1 years premium plus an escrow of 2 months)
• Documentary stamps on the note

Negotiating The Closing Costs
In addition to the sales price, buyers and sellers frequently include closing costs in their negotiations. This can be for both major and minor fees. A buyer may want to save on up-front expenditures, and agrees to pay the seller’s full asking price in return for the seller paying all the closing costs.