Closing Cost Information
One of the most common questions in real estate selling that we receive is, "Where do I get information about closing costs?" Closing costs are a valid concern among homebuyers and home sellers as they can complicate the seemingly straightforward process of selling a home. It is estimated that closing costs take up between 3% and 6% of a home's purchase price. Consequently, it is important for both parties involved in the property transaction to have a better understanding of what closing costs are involved in the sale of a home.
Closing Costs
Closing costs take place during the closing stage of a home sale. They cover such tasks and services as searches, clearances, and reports to process the transaction. Until recently, closing costs were hidden and were a source for possible exploitation by secondary parties involved in the home selling process. However, the U.S. Department of Housing and Urban Development has enacted laws designed to protect homebuyers and home sellers from this possibility. Consequently, you should receive information about closing costs from your loan source through a Good Faith Estimate, which documents in writing an estimate of all of the closing costs.
The Best Sources
However, it is still important that both the homebuyer and home seller be aware of all of the closing costs involved. The best source of information about possible closing costs is the U.S. Department of Housing and Urban Development. Additionally, consultation with your loan source will also reveal closing costs. You may also want to contact the "Consumer's Guide to Mortgage Settlement Costs," Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120 or call (415) 974-2163.
Examples of closing costs are: points or loan origination fees; escrow fees; homeowner's insurance; title insurance; property taxes; legal fees; private mortgage insurance; notary fees; document preparation fees; appraisal costs; factual credit report fee; tax service fees; survey costs; pest inspection costs; and state recording fees.
