Who Pays for What in a Real Estate Transaction

Many first-time home buyers seem to be confused as to who pays for what in a typical real estate transaction. We decided to provide our readers with a general guide that works for most transactions. Remember, the seller pays the real estate commission, not the buyer! There’s no excuse not to use the help of a REALTOR®! 🙂

Closing Costs – Who Pays For Wh

The SELLER can generally
be expected to pay for:

  • Real estate commission
  • Document preparation fee for Deed
  • Documentary transfer tax
    ($1.10 per $1,000 of sales price)
  • Any city transfer/conveyance tax
    (according to contract)
  • Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
  • Interest accrued to old lender, statement fees, reconveyance fees and any prepayment penalties
  • Termite inspection (according to contract)
  • Termite work (according to contract)
  • Home warranty (according to contract)
  • Any judgments, tax liens, et., against seller
  • Recording charges to clear all documents of record against seller
  • Tax proration for any property taxes owned at time of transfer
  • Any unpaid Homeowner’s dues
  • Any and all delinquent taxes
  • Notary fees
  • Any bonds or assessments (according to contract)
The BUYER can generally
be expected to pay for:

  • Title insurance premiums
  • Escrow fee
  • Document preparation (if applicable)
  • City transfer/conveyance tax (according to contract)
  • Notary fees
  • Recording charges for all documents in buyer’s names
  • Tax proration (from date of acquisition)
  • Homeowner’s transfer fee
  • All new loan charges (except those required by lender for seller to pay)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Assumption/change of records fees for take over of existing loan
  • Inspection fees (roofing, property inspection, geological, etc.)
  • Home warranty (according to contract)
  • Closing costs usually total 3% – 5% of the purchase price, and are in addition to your down payment
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