Closing costs critical to a real estate transaction

On Behalf of | May 29, 2018 | residential real estate

When people in Florida go to purchase a new home, figuring out their potential closing costs can help them make better decisions about how much they can afford to spend overall. In many cases, closing costs can be higher than people expect, especially for first-time or inexperienced home buyers and sellers. This means that it can be particularly important for people to know what to expect before they need to put down the money to cover these costs and finalize their transaction.

“Closing costs” is a general term used to describe all of the fees, charges and expenses relating to the settlement of a residential real estate purchase. How closing costs will be handled and who will bear their weight is often a subject of negotiations between the buyer and the seller. In addition, an agreement on closing costs can have an impact on the overall agreed sale price of the home.

In most mortgage loans, closing costs are included as part of the financial terms by the lender. Approximately three days before the specific settlement appointment, the lender will give the purchaser a statement that makes clear the specific costs. If buyers note a discrepancy from the initial terms, it is important to clarify quickly before moving on to closing. These costs can be substantial and often range from 2 percent to 5 percent of the total sales price.

When preparing for a residential real estate purchase, it is critical to fully understand all aspects of the sales contract as well as the mortgage loan. In some cases, closing costs can be bundled into the mortgage itself, but buyers should check for any impact on the interest rate. A real estate attorney may help home buyers and sellers protect their interests when engaging in any major transaction.