What are “closing costs?”

The process of buying and selling a home can appear complicated, but it doesn’t need to be. A good agent, supported by a solid team, can guide you smoothly through every part of the transaction.

What are closing costs?
When you sell your home, most of your interactions will be with your agent. But did you know there is also a small army of professionals making arrangements and processing paperwork on your behalf?

Surveyors, appraisers, underwriters, attorneys, title processors... Each of these specialists is doing their part to ensure a seamless transaction between you and the buyer of your home. “Closing costs” refers to the cost of the work they do on your behalf and any governmental fees charged to affirm and record the change of property ownership.

How are closing costs calculated?

To make matters more confusing, closing costs may be calculated in different ways. Some are set based on the sale price of your home. Others may be determined by the location or type of home you are selling. And some will be the same amount no matter what.

On average, you can expect that closing costs will total between 2.5% and 5.0% of the sale price of your home. That is a small percentage, but it is not necessarily a small amount. For example, a home selling for $400,000 could have closing costs between $10,000 and $20,000.

What is the role of an agent?

Once again, selecting a reliable and experienced agent is key. Your agent should discuss closing costs with you at the beginning of the process, as you determine the list price of your home. A good agent understands the importance of setting expectations and keeping you informed.

The more you know, the more control you have over your choices and their outcomes.