Short reads you can share with buyers and sellers. These guides are general information, and details vary by
state, county and contract.
What are closing costs?
The fees due at the closing table, beyond the price of the home.
Closing costs are the fees and prepaid items paid when a home sale closes. They commonly include lender
fees, title and settlement fees, recording fees, prepaid taxes and insurance, and escrow deposits.
Buyers usually pay most of them, while sellers typically pay commissions, any payoff of their existing
loan and their share of taxes and title charges. Who pays what is set by the contract and local custom.
Costs vary by county, loan type and price, so run a free estimate for the actual deal rather than
relying on a rule of thumb.
Title insurance, explained
How a one-time policy protects against problems with a property's ownership history.
Title insurance protects against covered problems with a property's ownership, such as unpaid liens,
recording errors or claims from past owners that were not found during the title search.
Unlike most insurance, it is generally paid once at closing and covers the policy period for as long as
the insured owns the property, subject to the terms of the policy.
Before issuing a policy, the title company searches public records and issues a commitment that lists
what must be cleared before closing.
Lender's policy vs. owner's policy
Two different policies that protect two different parties.
A lender's policy protects the lender's interest in the property and is usually required when a buyer
finances the purchase.
An owner's policy protects the buyer's own equity and legal rights in the home. It is optional in many
places but worth discussing with your agent and title company.
In some areas, buying both at the same time costs less than buying them separately, so ask for both
prices in your quote.
Who pays for what at closing
A general look at buyer and seller responsibilities.
Buyers commonly pay loan origination and appraisal fees, the lender's title policy, recording fees,
prepaid interest, and initial escrow deposits for taxes and insurance.
Sellers commonly pay agent commissions, the payoff of any existing mortgage, prorated property taxes,
and sometimes the owner's title policy, depending on local custom and the contract.
Negotiated credits can shift costs from one side to the other, so always confirm the final numbers on
the settlement statement.
How to prepare for closing day
A short checklist to avoid surprises at the table.
Review your Loan Estimate and Closing Disclosure side by side, and ask about any fee that changed.
Confirm the exact cash needed and how to send it, since wire instructions should always be verified by
phone.
Bring a government-issued photo ID, and schedule a final walkthrough shortly before signing.
Sellers should request a payoff statement early and run a net sheet again with final numbers to see
expected proceeds.
Ready to see real numbers?
Run a free estimate for your deal, or see what happens between contract and closing.
