Understanding Closing costs. 

Both buyers and sellers should be aware that there will be additional costs associated with the transaction. When financing, the following are estimates for closing costs (expressed as a percentage of the total sales price):

Less than 10% down:  closing costs estimated at 3%

19% or greater down payment: closing costs estimated at 3%

Who pays for what? Below are some examples of the expenses associated with the closing and who is the responsible party:


Pro-rated taxes and insurance

Taxes on the deed ($0.70 per $100)

Any required or promised repairs prior to closing

Broker/Realtors fee (for listing and buyer’s agent)


Initial “Good faith deposit” (often accompanies the offer)

Additional deposit (which will be credited back at the time of closing)

Title Search (although sometimes it’s the seller’s responsibility)

Escrow deposits required by lending agency/bank (taxes, home owner’s insurance, mortgage insurance).

Mortgage Insurance is required by lending agencies if putting less than 20% down

Taxes on the note and intangible tax ($0.35 per $100 and $0.002 x mortgage amount)

Title Insurance – this is not mandatory but highly recommended, as it will protect you of any title defects

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