Closing Costs for Buyers and Sellers
Closing Costs for Buyers and Sellers
Full Video Transcript Below
Buyer & Seller Closing Costs
[00:00:00] Well, good morning real estate fans. Alice Lema here, broker John L. Scott in beautiful southern Oregon with another edition of the Weekly podcast. Today we're gonna be talking about closing costs, what buyers and sellers need to know. There's a lot of confusion about closing costs and people are sometimes really surprised that there's more fees and and money involved than just the down payment.
So, let's talk about that. So first of all, what are closing costs? Closing costs are any of the extra services fees, costs associated with buying or selling, real estate. And that can be prepaid taxes. It can be prepaid insurance, it can be the real estate companies doing the sale or purchase, listing.
They can also be attorney's fees. Court recording fees, escrow, title. There's, there's quite a few on the list. And some of them are traditionally paid by the buyer, at least in the state of Oregon. And some of them are traditionally paid by the seller. But just the category, [00:01:00] what is all this money for? It's so you can pay the people, to do the work to get the property in your name.
So number two, how much money are we talking about? Well, it depends on if you're on the buyer's side or the seller's side, cuz the fees are, are slightly different, at least again in Oregon. So in Oregon for example, the sellers traditionally pay two-thirds of the title insurance and the buyer pays one third.
That's not the case in every state. So check with your state. But, there's also the commissions, they get paid to the real estate companies. They don't go to the agents, they go to the companies, the agencies, and Southern Oregon, that can be anywhere from 5% to 7% on average. And, that's usually paid by the seller.
Now, part of what. Comes up in an offer is that sometimes the buyers who are paying for the lender fees and, if [00:02:00] they're getting a mortgage, they have a much, bigger portion than a cash buyer would have to pay. And so their fees can be 3% of the purchase. So on a $300,000 house, for example, the buyer might have to do a down payment and another six to $9,000 to cover their closing costs.
That's a big surprise to a lot of people, including sellers. And sellers here's why you need to listen up, because when buyers are coming to buy your property, they don't just have to have the down payment, they have to have all this extra money. So don't be surprised in certain markets if the buyers start asking for this seller to cut into their equity, help credit some of the buyers closing costs. So what that'll look like in a contract, is seller will contribute up to 3% of purchase price, up to one and a half percent of purchase price towards the buyer's prepaid expenses, costs.
[00:03:00] Sometimes they're using it to buy down points. Yeah, so that's what that whole closing cost negotiation looks like now for seller. You know, that can be quite a bit of money because they're paying the commission for the agencies. Now in Oregon, the seller pays both of the parties agents, and the agents represent one party. So I know it's not like that in every state, but in Oregon, that's what it's like.
So, we have a negotiation, for an offer. You're gonna have to know ahead of time how much money you have, whether you're a buyer or a seller. So if you're selling, then you wanna ask the title company, perhaps early on before you get an offer, kind of what your list of expenses look like, ballpark. If you get an offer at a certain price on the buyers, your lender, or, again, the title company can possibly run a buyer's net estimate of what the fees are gonna look like. But if [00:04:00] you're getting a mortgage, it's gonna come from the lender.
So just be prepared because closing costs can be a big expense, and we don't want any surprises. We want all of our transactions to be happy, as much as possible, and smooth as much as possible. So please do plan on closing costs, and if you have any questions or need any help with your real estate, please contact me.
I'd love to be your agent. My number is 541-301-7980. Gimme a text, gimme a call, and let's talk about what we're gonna do in your real estate life next. All right, have a beautiful weekend. We'll see you next time.