What Are Closing Costs?

Closing costs are the fees charged to the buyer for the purchase of a home. The seller too has their own closing costs that are very different (and usually more expensive) than a buyer's closings costs. There is no "set amount" for closing costs and they vary quite a bit from transaction to transaction. In most transactions a buyer will incur the following:

• Mortgage closing costs
• Survey for the property he or she is purchasing
• Attorney fees
• Home Inspection
• Local state and town file fees

There may be additional closing costs if the property is a short sale or a foreclosure. Typically, each side of the transaction will pay for their own closing costs however in some cases all or part of the closing costs can be negotiated in the sale of the house. In addition to the fees above, if a property is purchased over $1,000,000 there is a 1% mansion tax paid by the buyer to the state of New Jersey based on the total sale price. Therefore, a buyer who purchases a house for $1,200,000 would have to pay a $12,000 tax to the state of New Jersey!

How Much Do Closing Costs Actually Cost???

The actual amount of a closing will vary greatly from transaction to transaction but you can estimate some costs.

The fees charged to originate a mortgage will depend on the lender so it is difficult to estimate however budgeting about 1%-2% of the loan amount should be more than enough.

• A survey of the property will cost about $300-$500. In some cases, for example all homes on Long Beach Island and in Beach Haven West, a flood elevation certificate will also be required. Flood elevations show the height of the property above sea level and are now required to purchase flood insurance. If the property is in a flood plain, expect to be required to have a flood elevation certificate.
• Attorney fees will usually come in at about $1,000-$1,500 for the transaction. The fee may be higher if the property is a short sale or foreclosure. As an alternative, you can skip the attorney and use a title agency to close the real estate transaction which will save some money but this is not recommended.
• Home Inspections are usually about $500 and are an excellent investment. This is HIGHLY RECOMENEDED IN ALL REAL ESTATE TRANSACTIONS as it will uncover an defects in the house of which you are not aware.

When looking to buy a home in Southern Ocean County, before you make an offer, sit down and go over the total costs of ownership to make sure you have enough money to comfortably complete the real estate transaction. We can help you with this so feel free to contact us with any questions!