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Ohio Real Estate Closing Costs for Buyers

Closing costs can be a significant amount of money when buying a home and most of them come out of the buyer's pocket. Here are the typical closing costs charged in Ohio, who pays what, and advice on how to save money when it's time to close on your new home.

Closing costs can be a significant amount of money when buying a home and most of them come out of the buyer's pocket. Here are the typical closing costs charged in Ohio, who pays what, and advice on how to save money when it's time to close on your new home.

After years of setting aside a little every month and socking away every yearly bonus, you finally have a down payment to buy a house. You’ve picked up the phone to call a realtor. But do you really have enough money to buy a house?

Unfortunately, you could need several thousand dollars over and above the down payment to buy a house. You might have planned on paying for a home inspection, but that’s not a significant expense when compared to closing costs. A local real estate agent can set realistic explanations on the additional costs involved in Ohio, so that you know how much money to save for them.

Want to connect with a top-rated, Ohio buyer’s agent? Fill out our online form and a Clever representative will introduce you to one of our local Partner Agents for a no-obligation consultation.

Closing Costs for Ohio Homes: What to Expect

Many professionals prepare and review the different forms involved in buying a house, and they all charge for their time. There are mortgage underwriting fees, title search fees and appraisal fees. The state will charge taxes on the sale and the country might charge recording fees. All of the fees involved in buying a house are lumped together under the banner term “closing costs.”

The buyer pays any fees associated with getting a mortgage. Typical fees could be application fees, interest paid up front, loan origination and underwriting fees, and escrow deposits. A $300 application fee may seem small when compared to a home’s overall price, but these fees add up.

According to a study from Bankrate, origination plus third-party fees for a closing in Ohio average $2,031. This average doesn’t include other costs such as title insurance, title search, taxes, other government fees, escrow fees and discount points because they’re too variable. Plan on your closing costs being higher than this average.

Closing costs average between 2-3% of what you pay for the home. Median home values in Ohio are $139,600, so your closing costs could be between $2,792-$4,188. Forgetting to include closing costs in your home buying budget could lead to problems if you have to scramble to come up with the cash.

Common Closing Costs for Ohio Home Buyers

Many of the closing costs you’ll pay are associated with your mortgage, which is why buyers typically pay more closing costs than sellers.

At almost every step of the mortgage application process, lenders charge a fee. A loan application fee, a credit check fee, an underwriting fee, an appraisal fee, expect to frequently open your checkbook. Lower-qualified applicant could be required to pay interest, or points, up-front to lower the bank’s risk.

In Ohio, the state charges real estate transfer taxes of $1.00 per $1,000 of the home’s selling price. The assessor’s office may charge title recording fees, and the title search is also your responsibility.

Home buyers in a buyer’s market have more negotiating power. If that’s you, you might be able to negotiate with the seller for them to pay some of your closing costs. Sellers can’t contribute anything to cover fees related to your mortgage, but might be willing to split other fees. Your real estate agent will have suggestions on which costs can be negotiated or reduced.

Other Costs to Consider

After the closing costs have been paid, you’ll need to afford the costs of home ownership.

At your closing, mortgage lenders usually require that new home owners put at least half a year’s property taxes into an escrow account. The lender will pay the property taxes for you, which protect their assets. If you don’t pay your property taxes the city will place a lien against the property and they want to make sure this doesn’t happen.

For the same reason, payments for your homeowners insurance will be included in the escrow. Your house is the collateral for your mortgage. If you don’t buy a homeowners insurance policy and something happens to your house the bank’s asset is now at risk.

Monthly utility bills for heat and electricity can be expensive, particularly during an Ohio winter. If your rent payment previously included heat and electricity, ask the current owner for an estimate of these expenses so you can budget for them. Heat alone can run several hundred dollars a month in the coldest type of the year, depending on your heating system.

And that heating system could break at a very inconvenient time. We recommend you set aside at least 1% of your home’s value each year for maintenance. Each of your home’s major systems will need yearly maintenance to stay in top form and be at their most efficient.

The cost of owning a house are more than just your monthly mortgage payment. Before deciding to become a homeowner, ensure your financial stability and put all these costs into your budget.

How to Save on Closing Costs in Ohio When Buying a Home

Paying less for your home will save you money on the house itself but also in closing costs. Real estate agents are experts in negotiation and can help you bargain with the homeowner for a lower price.

When you’re ready to make an offer, they’ll know if it’s a buyer’s or a seller’s market, if other offers have fallen through, or if the house has been on the market for a while. These factors could help you place an under-market bid that the seller will accept. The home inspection provides another opportunity for negotiation. The home inspector could find repairs that are needed that you can use to barter down the seller’s asking price.

Scheduling your closing date to the end of the month saves you money, too. Mortgage lenders charged accrued interest for the days out of the month that you own the home, so if you own it for just a few days you won’t pay much interest.

Home buyers, particularly first-time home buyers, can get help with closing costs through state assistance programs. You might qualify for a grant or a no-interest loan. The Ohio Housing Finance Agency offers down payment and closing cost assistance of 2.5% or 5% of the home’s purchase price. If you still own the home at year seven they forgive the loan.

Clever Partner Agents save you money at every step throughout the home buying process, but also at closing. Agents in our network offer Home Buyer Rebates to buyers to make homeownership even more accessible. This $1,000 rebate (if eligible) can be applied to closing costs to save even more. Reach out to be connected with an agent in Ohio today!

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Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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