Helping Buyers Understand Closing Costs

Now that the market has settled a bit, I see more first time home buyers entering the market. And even for experienced buyers, most folks want to know what their all-in costs are going to be. If I buy a $600,000 house, how much do I really need to close? What’s my total all-in costs? If you want to know what the bottom line was going to be, read on.

IT DEPENDS!

I know, I hate that answer too, but it’s true. It very much depends on whether you are financing, how much you are financing, are you buying down interest rates and paying points? When are you buying, have taxes already been paid? Is this for a home or acreage? How much is the seller contributing to closing costs? Are there transfer fees? Let me share the typical costs for buyers to purchase a single family home with some acreage in Douglas County. I’ll also detail the costs that the sellers typically pay. This is for a $600,000 home with a $6,000 earnest payment and assuming a 97% loan amount.

This Buyer will need at least $19.5k in cash to close on a $600k home. Notice there are still some TBDs and variability in the table.

% Breakdown of costs

In this particular example, the Buyer wanted to buy a $600,000 home. They provided a $6,000 earnest money (or deposit), also paid for the inspection of $750 out of pocket, and then needed to bring at least another $12,667 to closing. The buyer was waiting on a final estimate from the lender to cover the loan closing costs.

Remember, many of these costs are negotiable as part of your transaction with the seller and may be negotiable with the lender. Some of the costs may not be relevant to your particular transaction OR you may have other costs which are over and above this. If you have any specific questions, feel free to reach out and I’ll add some clarity.