I find that many buyers and sellers are surprised by closing costs. I want my clients to be well-informed so, I’ve gone through some past closings to provide some real life examples.
You have to remember that closing on a property is a complex legal transaction involving buyers, sellers, lender, insurer, and others. There are multiple taxes, insurance premiums, and fees for services that are usually paid during closing. I won’t go into the details because it could probably be a whole textbook. This is why there are companies and professionals who’s only job is closing real estate transactions. I say all of this to explain why closing costs might seem high—there’s a lot going on behind the scenes.
When you see these numbers, don’t panic. It’s rare for buyers or sellers to write a check for their closing costs. Let me explain…it’s not always the case, but usually sellers are making money at the closing. When the buyers get a loan, the bank sends a bunch of money to the closing company. The closing company pays off the sellers’ old loan. Then they pay the sellers’ closing costs. Finally, they give what’s leftover to the sellers.
So the sellers didn’t have to actually come up with cash for the closing costs but what about the buyers? I would say in about 9 out of 10 cases, when making an offer, buyers ask the sellers to pay their closing costs too. So here’s the situation: the buyers get a loan > the bank sends a bunch of money to the closing company > the closing company pays the sellers’ old loan > they pay the buyers’ closing costs > they pay the sellers’ closing costs > they give what’s left over to the sellers. The end result…all of the closing costs came from the buyers’ loan or the sellers’ equity depending on how you look at it.
Having a good idea of the closing costs will let you know if buying or selling makes sense for you right now. I’ve taken several past closings and added up all of the closing costs to give you an idea of what to expect. All of these are real closings in Spring Hill.
I find that many buyers and sellers are surprised by closing costs. I want my clients to be well-informed so, I’ve gone through some past closings to provide some real life examples.
You have to remember that closing on a property is a complex legal transaction involving buyers, sellers, lender, insurer, and others. There are multiple taxes, insurance premiums, and fees for services that are usually paid during closing. I won’t go into the details because it could probably be a whole textbook. This is why there are companies and professionals who’s only job is closing real estate transactions. I say all of this to explain why closing costs might seem high—there’s a lot going on behind the scenes.
When you see these numbers, don’t panic. It’s rare for buyers or sellers to write a check for their closing costs. Let me explain…it’s not always the case, but usually sellers are making money at the closing. When the buyers get a loan, the bank sends a bunch of money to the closing company. The closing company pays off the sellers’ old loan. Then they pay the sellers’ closing costs. Finally, they give what’s leftover to the sellers.
So the sellers didn’t have to actually come up with cash for the closing costs but what about the buyers? I would say in about 9 out of 10 cases, when making an offer, buyers ask the sellers to pay their closing costs too. So here’s the situation: the buyers get a loan > the bank sends a bunch of money to the closing company > the closing company pays the sellers’ old loan > they pay the buyers’ closing costs > they pay the sellers’ closing costs > they give what’s left over to the sellers. The end result…all of the closing costs came from the buyers’ loan or the sellers’ equity depending on how you look at it.
Having a good idea of the closing costs will let you know if buying or selling makes sense for you right now. I’ve taken several past closings and added up all of the closing costs to give you an idea of what to expect. All of these are real closings in Spring Hill.
| Buyer’s Closing Costs Examples |
| Closing Costs | County | Total Investment |
| $6,079.19 | Maury | $170,000.00 |
| $6,519.42 | Maury | $178,000.00 |
| $6,654.72 | Maury | $220,000.00 |
| $8,992.49 | Maury | $200,000.00 |
| $4,114.24 | Williamson | $155,000.00 |
| $5,553.68 | Williamson | $285,000.00 |
| $9,259.72 | Williamson | $283,000.00 |
| $6,307.90 | Williamson | $225,000.00 |
| $9,199.24 | Williamson | $299,900.00 |
| $10,683.36 | Williamson | $224,900.00 |
| Seller’s Closing Cost Examples |
| Closing Costs | County | Total Investment |
| $9,799.00 | Maury | $170,000.00 |
| $11,910.00 | Maury | $178,000.00 |
| $14,373.44 | Maury | $200,000.00 |
| $14,646.40 | Maury | $220,000.00 |
| $10,452.00 | Williamson | $155,000.00 |
| $13,543.00 | Williamson | $224,900.00 |
| $15,150.70 | Williamson | $283,000.00 |
| $15,974.00 | Williamson | $225,000.00 |
| $19,381.97 | Williamson | $299,900.00 |
| $20,483.75 | Williamson | $285,000.00 |
Please also see my post How to Estimate Closing Costs in Spring Hill.
