What Closing Costs Do Buyers Pay?

Buyers typically pay for costs related to securing their mortgage and protecting their ownership rights. These costs typically include:

• Loan Origination Fees – Fees charged by lenders for originating the mortgage.
• Appraisal & Inspection Fees – Confirms the value and condition of the home.
• Title Insurance & Escrow Fees – Protects buyers from potential ownership disputes.
• Property Taxes & Homeowner’s Insurance – Typically prepaid at closing.
• Recording Fees – Paid to the county to record the property transfer.

In Metro Detroit and Oakland County, purchasers should expect to pay 3% to 5% of the home purchase price in closing costs.

Which Closing Costs Are Paid by Sellers?

Sellers typically pay fees related to the agent’s commission and transfer of ownership. These usually include:

• Real Estate Agent Commissions – Usually 5% to 6% of the home’s sale price, split between the buyer’s agent and seller’s agent.
• Title Transfer Fees – Covers the legal transfer of ownership.
• Seller Concessions (If Negotiated) – Sellers may agree to pay a part of the buyer’s closing costs to help close the transaction.
• Outstanding Property Taxes or HOA Fees – Any amounts that are outstanding must be settled before closing.

Can Buyers and Sellers Negotiate Closing Costs?

Yes! In competitive markets, sellers can offer concessions to pay some of the buyer’s closing costs as an incentive. Buyers can also negotiate lender fees and comparison shop for title services to lower their costs.