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What do closing costs include?

On Behalf of | Oct 25, 2021 | Real Estate Law

Buying a home for the first time in New Jersey can bring feelings of excitement and overwhelm. Without prior experience, you may wonder where to begin.

Working with a realtor can help indefinitely, but knowing the meaning of certain terms can help you make confident decisions. Closing costs, for example, reference a series of expenses you will need to satisfy as part of your purchase agreement.

Types of closing costs

The amount of money you spend on closing costs will vary depending on several factors including state laws, where you live and the type of property you buy. However, according to U.S. News, on average, homebuyers could spend anywhere from $6,000 to $15,000 to close. This amounts to roughly 2% to 5% of the overall purchase price.

Closing costs may include fees for the following:

  • Inspection
  • HOA transfer
  • Appraisal
  • PMI
  • Property taxes

Negotiating a deal

Something you may not know is that you can attempt to negotiate how much you pay in closing costs. Even if you cannot get the seller to pay for all of the closing costs, working a deal may at least alleviate some of the costs so you can save money.

Do not hesitate to ask the seller which costs they have included in closing. You deserve to know exactly what you will pay for so you can anticipate your responsibilities. Working with an attorney may help you to verify the legitimacy of the purchase agreement so you can confidently proceed with your investment. Even though the seller initiates the terms of purchase, you have the right to a fair and reasonable agreement.