What are closing costs?
“Closing”, also referred to as completion or settlement, is the final step of completing a real estate transaction. At closing, the title of the property is officially transferred from the seller to the buyer. At this point in time, the lender will receive the buyer’s down payment and the buyer will start to pay their monthly mortgage costs.
Taking the concept of closing one step further, the “closing costs” are all of the expenses that are paid out at the closing of a real estate transaction. Both buyers and sellers will have separate closing cost amounts. Home buyers will pay anywhere from 2 to 5% of the home’s purchase price in closing fees, whereas sellers tend to pay for the real estate agent’s commission.