What are closing costs? How do you know what you’ll have to pay for them?
Closing costs consist of escrow fees, title fees, lender fees, taxes, and the first mortgage on the home that needs to be paid off. Taking all that into consideration, the majority of buyers end up surprised by what they have to pay.
We always like to educate our buyers about what to expect in a home sale, and that usually means giving them an estimate on what they will have to pay for closing costs up front.
The most accurate way to estimate what you’ll have to pay in closing costs before actually closing on the house is to speak with a local Realtor or lender so they can review the numbers with you. If you’re submitting an offer for a home, they can let you know how much you’ll need for a down payment and all your closing costs so you’re not surprised or caught unprepared at the last minute.
As a rule of thumb, closing costs are usually 2% to 5% of the home’s purchase price. Again, though, always consult with a professional to find out for sure.
If you have any questions about closing costs or you’re thinking of buying or selling a home in the Sacramento area, don’t hesitate to reach out to us. We’d love to help you.