Closing Costs – How Expensive are They?

Calculator

It depends upon where you live, of course.

Bankrate did a survey in 2009 and 2010 of 49 states, 2 areas in California and the District of Columbia.

The 5 most expensive states for closing costs are:

  1. New York – origination fees, title and closing costs = $5623
  2. Texas – origination fees, title and closing costs = $4708
  3. Utah – origination fees, title and closing costs = $4605
  4. California – origination fees, title and closing costs = $4566
  5. Alaska – origination fees, title and closing costs = $4327

North Carolina ranked 51 out of the 52 areas surveyed with total closing costs averaging $3255.  Hooray North Carolina!  Everyone should live here!

Arkansas was the least expensive coming in number 53 with costs averaging only $3007.

These numbers were based on a $200,000 purchase with 20% down.

For a breakdown of costs in your state, check out Bankrate.com.

Why is it important that you understand your closing costs?

First Time Homebuyer Questions

Home for sale sign

My son and daughter-in-law are in the process of buying their first home (they want that $8000 tax credit!) and they’re asking some really great first time homebuyer questions.  I thought I’d repeat some of our conversation here:

No seller really expects a full price offer, not in this economy anyway.  The past national average was that offers came in 3%-5% below asking price.   Now experts say the average national discount is about 10%.  Sellers are not surprised when you offer less than they’re asking.

6% real estate commission is the norm in most states.  If you buy from a for-sale-by-owner, you can use this to reduce your asking price since, if you buy their home, they won’t be paying that commission.  The seller knows this will be a cost if they list the property and they expect to pay some commission if a Realtor brings them a buyer.

Closing costs. Both buyers and sellers pay some and can negotiate who pays what. In North Carolina, typically what the buyer pays includes:

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