Getting ready to close on a property, whether you’re buying or selling in Houston, is an exciting time, and it’s easy to lose sight of what things will eventually cost. Let’s take a look at how much closing fees are for buyers and sellers in Houston to de-mystify the financial impact of closing:
The General Rule of Thumb
If you’re buying or selling a home in Houston, you should plan for your closing costs to equal about 3% to 6% of the sale price of the home.
Those of you in the buyer’s seat have the added benefit of knowing that your mortgage lender will scrutinise your financial status to assure a healthy return if they choose to accept your home loan. In order to ensure both of your financial futures, the lender will go over all of the details of anticipated closing fees.
Home sellers, on the other hand, are more likely to have their closing expenses covered because they should be getting a reasonable return on the time, effort, and money they’ve put into their property over the years.
Agent Commission
Out of all of the individual closing costs, real estate agent commissions tend to be near the top of the list.
Some buyers and sellers believe they can do the job of an agent without spending the extra money, yet the agent is typically doing a lot of heavy lifting that goes unnoticed by their clients. Agents ensure that documentation is filed correctly while also attending to their clients’ needs. Their years of knowledge make the bargaining process less stressful for both buyers and sellers, and the agent does all possible to keep a deal moving forward as long as their client wants it to.
We recommend meeting with at least three agents and asking them any questions you may have at the time. Before signing any contracts, get a sense of how they function and how comfortable you are with each of them.
Finally, an agent’s commission isn’t written in stone, and you might find that an agent is prepared to work out a deal with you. So, when buying or selling a home in Houston, don’t settle for just anyone to represent you — pick a professional who is dedicated to making the transaction a success.
Legal Representation
Some states and municipalities have regulations requiring an attorney to oversee the transfer of ownership of any property, and they may even demand legal representation for both the buyer and the seller.
If this isn’t a legal requirement where you reside, having an attorney who specialises in real estate law assist with the closing of the sale can’t harm. Frequently, the buyer’s lender will hire a local attorney to oversee the transfer of ownership.
If you’re an FSBO seller selling directly to a buyer who isn’t using an agent or a lender, both the buyer and seller may agree to engage an attorney to ensure everyone’s legal rights are protected.
Miscellaneous Fees
You will see a variety of supplementary fees on top of the primary components of your closing costs that we have previously covered. These fees might vary greatly depending on the location of the property.
Prorated property taxes, title transfer, title insurance, underwriting charge, recording fees to update public records, and appraisal fees are just a few examples. These can add up quickly, but they won’t account for the majority of your closing costs.
It may seem crucial to comprehend each and every one of these, and you should have the option to have your mortgage lender or real estate agent break down and explain any and all of your closing fees to you.
Help Understanding Closing Costs
If you’re buying or selling a Houston home and want to better understand the closing costs, contact us today at (713) 866-4000!