Closing Costs are those pesky things that you do not always think about up front when looking for a home or even selling one. Part of understanding closing costs and how they are determined has to do with governmental taxes, fees for recording of the new deed, fees for the title search to verify that the seller has clear title to sell. Others may be ‘discount points’ for your loan. In any case, getting an estimate at the beginning of the process is the best you can hope for. Often times, although a trained professional can perform a close estimation process, even your realtor will not know the exact bottom line until the paper is ready to sign and you have to put the money on the table.
Closing Costs for the Seller
Easy. They take the closing costs right out of your proceeds from the sale. You do not have to bring money to the table. In most cases, however, you want to know what you are paying for, and how much you are loosing in payout to the fees.
Property taxes, recording the release of lien from your mortgage lender, closing agent, document preparation, and real estate commission all play a part in your closing cost. A good rule of thumb is to calculate approximately 3% of the selling price. It’s not exact, but it’s a good way to get started.
Closing Costs for the Buyer
This is money you need to bring with you to the table. Even if you roll the closing costs into the loan, there is usually something that was missed, or something that needs to be paid directly that may get you later. Bring your checkbook to closing, as well as the certified funds for the amount the closing agent tells you based on your closing package.
At closing, you will be looking at between 10% and 25% of the purchase price of the home. This includes the down payment, sales taxes, recording fees, closing agent fees, document preparation fees, and discount points on your loan if any. It could also include fuel fees if the seller is leaving you tanks of propane or fuel oil that have already been paid for. Any inspections or surveys not paid prior to settlement will be included in this final total for your closing on the Jacksonville property.
Getting the Low-Down on the Bottom Line
Your realtor will be able to give you good estimates based on your local tax structure and the fees commonly charged by recording officials in the municipal system of Duval County. Each item should be listed along with the best estimate of the charge. You do have the right in most locations to view the settlement sheet or HUD1 form 24 hours prior to closing. The sheet should have a summary of the charges as they stand currently and are considered reasonably well set at this point. Any ‘discovery’ made before settlement may change this but it is usually not a large change unless there was a serious error along the way.
Posted by Carey Frankel on
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