First, it might be helpful to talk a little bit about what closing costs are, before we jump into specifics.
Closing is another way to talk about the settlement of property, or the closing of the transaction. These two terms are used interchangeably.
During closing, there is often a meeting between the buyer and seller, along with the title agent, the involved real estate agents, and sometimes a representative of the lender.
Any paperwork that needs to be completed or money that must change hands before the property is officially sold will take place during this meeting.
Because there are many credits and debits on both sides, the title agent will prepare a summary of the total costs. This summary is called the settlement sheet or final closing costs.
Closing is another way to talk about the settlement of property, or the closing of the transaction. These two terms are used interchangeably.
During closing, there is often a meeting between the buyer and seller, along with the title agent, the involved real estate agents, and sometimes a representative of the lender.
Any paperwork that needs to be completed or money that must change hands before the property is officially sold will take place during this meeting.
Because there are many credits and debits on both sides, the title agent will prepare a summary of the total costs. This summary is called the settlement sheet or final closing costs.
It is important to note that real estate practices and laws differ from state to state and even within a state, there can be different customs.
This article will focus on real estate transactions within the Lehigh Valley area of Pennsylvania as that is where we are based.
It’s always best to consult with a professional in your area in order to get an accurate idea of your own potential costs.
This article will focus on real estate transactions within the Lehigh Valley area of Pennsylvania as that is where we are based.
It’s always best to consult with a professional in your area in order to get an accurate idea of your own potential costs.
Click below to see closing costs for each side of the transaction.
Since the settlement sheet details all the credits and debits on each side, both the seller’s and the buyer’s costs start with the sale price.
The buyer owes that amount plus additional items and the seller is set to receive that amount minus any costs.
The final amount is usually much different once all of the line items are added or subtracted.
*Remember, a credit is an amount that is added to the total and a debit is an amount that is subtracted.
The buyer owes that amount plus additional items and the seller is set to receive that amount minus any costs.
The final amount is usually much different once all of the line items are added or subtracted.
*Remember, a credit is an amount that is added to the total and a debit is an amount that is subtracted.
Buyer's Closing Costs
The buyer has the bulk of the cost, as would be expected, but they have roughly the same number of line items on the settlement sheet.
The buyer gets to choose the title company and while your agent may have a recommendation, know that you always have a choice.
Be careful of title companies or lenders that are “in house” with a real estate agency. They do not always have the lowest fees and they can have additional charges.
If you are not sure, call a second title company to get an estimate of their costs. Odds are that will tell you whether the charges of the first company are in line or not.
Here are the items you can expect to see on the settlement sheet if you are the buyer:
The buyer gets to choose the title company and while your agent may have a recommendation, know that you always have a choice.
Be careful of title companies or lenders that are “in house” with a real estate agency. They do not always have the lowest fees and they can have additional charges.
If you are not sure, call a second title company to get an estimate of their costs. Odds are that will tell you whether the charges of the first company are in line or not.
Here are the items you can expect to see on the settlement sheet if you are the buyer:
After all of the closing costs are totaled up, you will see a final amount listed as “cash from borrower” or something similar.
This is the total amount you owe and it can vary greatly depending on how much you are putting down on the mortgage.
You should have received this amount before settlement and you should have with you a cashier’s or certified check for that amount.
This is the total amount you owe and it can vary greatly depending on how much you are putting down on the mortgage.
You should have received this amount before settlement and you should have with you a cashier’s or certified check for that amount.
Seller's Closing Costs
Although the seller should be walking away from settlement with a little extra spending money, there are still some pretty hefty expenses involved in selling a house.
If you’ve already listed your house, your agent should have given you an estimate of your closing costs, so none of this should be a surprise.
But, if you are still in the decision phase, knowing your estimated net proceeds may help push you in one direction or the other.
Here are the items you can expect to see on the settlement sheet if you are a seller:
If you’ve already listed your house, your agent should have given you an estimate of your closing costs, so none of this should be a surprise.
But, if you are still in the decision phase, knowing your estimated net proceeds may help push you in one direction or the other.
Here are the items you can expect to see on the settlement sheet if you are a seller:
summary
Remember, Pennsylvania law requires that real estate agents for the buyer or seller must provide an estimate of closing costs before the signing of the agreement of sale.
If you don’t have an agent representing you, then of course that is not the case. You would still receive a copy of the settlement sheet from the title company a day or so before closing and if you need an estimate sooner, the title company can provide it.
If you are not sure about your representation, contact us to learn more about agency and the ways you can be represented by a real estate agent in Pennsylvania.
If you don’t have an agent representing you, then of course that is not the case. You would still receive a copy of the settlement sheet from the title company a day or so before closing and if you need an estimate sooner, the title company can provide it.
If you are not sure about your representation, contact us to learn more about agency and the ways you can be represented by a real estate agent in Pennsylvania.
