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When I bought my first home at 22 years old, I was clueless about closing costs. The additional money I needed to close on top of my down payment and inspections threw me for a major loop! Mind you, I bought my first home in the 2001 so I didn’t have as many advantages of the internet as we do now. I thought it was pretty amazing that I had a 20% down payment for a condo only to find out I needed another $2,500 for various fees, etc. I had plans to make some updates to my condo before moving in, and some of those plans had to take a back seat due to funds.
After that experience, I always thought about what I would so differently next time I bought or a home or if I ever became a real estate agent…and ta-dah! I moved back to Ohio 8 years later and bought a home in Clintonville and 5 years after that I became a REALTOR.
So, back to closing costs. These are the fees for everything it took to get you to the closing table aside from the inspection fees and appraisal fees you, as a Buyer, likely already paid along the way. Closing costs can include your Buyer agent fee, title fees, recording fees, brokerage fees, loan application, underwriting, title insurance, home insurance, property taxes, survey cost, and any other service used to ensure a smooth and legal transfer of ownership. These fees can vary from 2-5% of the purchase price. Whether or not the Seller is paying the Buyer agent fee will make a big difference in your closing cost total. In Ohio, this fee can now be included and asked for in the purchase contract (offer).
Lenders must provide a “Closing Disclosure” 3 business days before closing outlining all final costs. This leaves Buyer a bit nervous about what that final number will be, but keep in mind your lender will share a pretty accurate estimate of these costs from the very beginning.
Buyers can request the Sellers pay a portion or all of the closing costs, though in a Seller’s market this isn’t recommended. I encourage my Buyers to ask the Sellers to cover the Buyer’s agent fee and plan to cover the remaining expenses themselves. Additionally, I ensure my Sellers know this will likely be a request that most Buyers make and to take that into account when tallying potential net proceeds with the sale of their home.
Be sure when you’re saving for your next home, that you’re taking into account closing costs as well as setting aside some money for making the home “yours” upon move in.
Thinking about buying or selling in Columbus, Ohio this year? Reach out anytime to chat about your goals, the current market, and what’s possible for your next move.
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