If you’ve never purchased a home before, the fact that you have to pay closing costs may catch you off guard. Many buyers are unaware that they could be responsible for paying thousands of dollars in fees before officially closing on the home. Buyers aren’t the only ones who have to pay closing costs—sellers are on the hook for some of these fees as well. Take a look at who typically pays closing costs on homes for sale in Colorado Springs:
In most cases, the seller will be responsible for paying the real estate agents’ commission at closing. This means he will pay the commission for both the agent representing the seller and the agent representing the buyer. The amount that the seller has to pay will depend on the commission percentage and the purchase price of the home. The typical commission rate is 6% of the purchase rate, which is then split between the two agents. How do real estate agents get paid
Unfortunately, buyers will usually have to pay the majority of closing costs. Many of the fees that buyers will have to pay are associated with taking out a loan to finance the house. If you are paying for your house with cash, these fees won’t apply to you.
Some of the fees that buyers will be expected to pay at closing include appraisal fees, origination fees, credit reporting fees, recording fees, notary fees, title insurance fees, and bank processing fees. Total closing costs can vary greatly, but it’s estimated that buyers generally pay closing costs that are between 2-5% of the purchase price of the home.
Buyers will receive a closing statement that lists each item that they are responsible for paying at closing. Your agent should provide this to you at least three days prior to your closing date so you have plenty of time to look it over. It’s important to carefully review this document with your real estate agent to ensure you understand what you owe.
Open to Negotiation
Even though the buyer is typically on the hook for most of the closing costs, this isn’t set in stone. In fact, it’s very common for buyers and sellers to bring up closing costs during the offer negotiations. In a seller’s market, the seller may ask the buyer to take on some of the real estate agents’ commission to sweeten the deal. In a buyer’s market, the buyer may ask the seller to take on a portion of the closing costs. If you’re concerned about closing costs, talk to your agent to see if it’s possible to negotiate.
Now that you know everything about the closing costs that you will be expected to pay, contact
Farrell’s Sales to get started on your home buying journey. Marianne Farrell has lived in the Colorado Springs area for over three decades, and over that time, she has become the go-to real estate agent for both homebuyers and sellers. Call 303-796-7000 today to get started on your search!