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Re-examining Closing Costs

by UrbanTurf Staff

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The Washington Business Journal reported today that closing costs in DC and Maryland are well below the national average. Given this news, it seemed like a good time to re-examine what is actually included in these costs that remain a mystery to many homebuyers.

Closing costs are essentially fees paid at the settlement table of a home buying transaction. The fees usually include taxes, lender and financing costs as well as attorney and other administrative fees. Closing costs generally range between 2 and 7 percent of the property value, and you must pay these costs before moving into your new home.

Below are a range of typical fees for the DC area, which vary depending on the cost of the home.

Note: Closing costs are not negotiable, but in a home buying transaction, a seller may give a credit to the buyer for closing costs at the settlement table, so that the buyer can wrap their closing costs into their mortgage.

  • DC Transfer Tax (1.45 percent of sales price or 1.1 percent of sales price under $400K)
  • Settlement Fee ($100-$500)
  • Release Preparation Fee ($75-$150)
  • Release Recording Fee ($50-$75 per lien)
  • Messenger Fees ($50-$100)
  • Lender Application Fee ($295)
  • Title Search ($200)
  • Title Insurance ($1,000-$5,000 depending on the price of the home)
  • Appraisal Fees ($300)
  • Inspection ($385)
  • Survey Fee ($250)
  • Credit Report Fee ($55)
  • Deferred Transportation Related Facilities Charges ($300-$500)
  • Well or Septic Certification Fees ($200-$500)
  • Home Buyer’s Warranty ($300-$600)

See other articles related to: dclofts, closing costs

This article originally published at https://dc.urbanturf.com/articles/blog/reexamining_closing_costs/2382

4 Comments

  1. Zid said at 7:39 pm on Monday August 16, 2010:

    Anyone have any thoughts on which of these fees are most likely to be negotiable?  Loan origination? Lender application?

  1. Nancy said at 10:20 am on Tuesday August 17, 2010:

    Any fee you would pay to the mortgage company is negotiable. You are about to borrow hundreds of thousands of dollars from them and they stand to make a ton of money - they can certainly negotiate their fees.

  1. JT said at 2:46 pm on Tuesday August 17, 2010:

    I would say other than fees that go straight to the government everything is negotiable.  i.e. lender rate / fees, title insurance, settlement attorney fees, etc.  There’s a profit margin in there somewhere.

  1. Nikki Smith said at 4:48 pm on Tuesday August 17, 2010:

    About 70% percent of closing costs that are variable are title related. That’s the main reason why it’s so important to shop title service providers. Most companies offer an online quote to help homebuyers budget for closing costs.

    Another tip: Homebuyers may consider settling toward the end of the month. This will help to lower daily interest charges, which will in turn help lower the amount paid at settlement.

Comments are closed.

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