For many people, the amount of closing costs is important when buying a house. Unfortunately, it is almost impossible to obtain an exact amount in advance due to the fact that many fees and costs can vary from the date you first view the property to the date the Deed is actually signed over to you. Here is a breakdown of the most common fees and costs that are associated with most real estate transactions.
Document Preparation
Typically, the Seller is responsible for having an Agreement of Sale prepared by an attorney. In addition, the attorney will prepare the Deed transferring title to the Buyer – this is also usually the responsibility of the Seller. Both of these fees can be paid at closing.
Filing Fees
Any time a document is filed in the courthouse, there is customarily a filing fee. Here are the filing fees in Schuylkill County associated with real estate transactions, broken down by which party is responsible for paying (buyer and/or seller):
Buyers’ Responsibility
- Deed Recording Fee – To record the Deed, transferring title into your name in the Recorder of Deed’s office, the filing fee is $86.75.
- UPI Certification fee – When a Deed is filed, the parcel number must be verified. There is a fee of $10.00 for this.
- Mortgage Recording Fee – To record a mortgage in the Recorder of Deeds office, the filing fee is $86.75 for the first 4 pages and $4.00 for each additional page. Most mortgages are more than 4 pages.
Seller’s Responsibility
- Satisfaction for any liens against the real estate – for example, if there was a mortgage on the property, the seller would be responsible for the filing fee for filing a satisfaction with the courthouse to remove that lien. The filing fee in Schuylkill County for Satisfactions is currently $60.75.
All filing fees can be paid at the time of closing.
Costs Split Between Buyer and Seller or Both Party’s Responsibility
Typically, buyers and sellers split the transfer tax, which is the tax assessed against any transfer of real estate in Pennsylvania. The tax is based upon the purchase price, generally, but can be based upon a different valuation depending upon the circumstances of the transfer. Transfer tax is generally calculated at 2% of the purchase price. Buyers usually pay 1% and sellers usually pay 1%. This is also paid at closing.
Title Insurance – Buyers Responsibility
Any time you purchase real estate with a mortgage, the lender requires you to obtain title insurance. This will protect you and the mortgage company from any title defects and will further expose any liens or encumbrances associated with the real estate. Title insurance is a statewide premium – meaning, it is generally the same cost statewide. The premiums are based upon the purchase price of the real estate. The current statewide premium for title insurance for any purchase of real estate costing $30,000.00 or less is $569.00. The higher the purchase price, the higher the one-time premium is.
It is highly recommended that you obtain title insurance and have a title search conducted for all real estate transactions, not just those involving mortgages.
In addition, there are a few miscellaneous fees associated with the title search and insurance process. Title insurance companies issue certain endorsements which are required by a lender. Endorsements are additions and/or protections to the basic title insurance policy. These vary from one real estate transaction to the next.
Miscellaneous – Not Considered “Closing Costs”
If you are purchasing your home with a mortgage, your mortgage company may require you to escrow your taxes and homeowner’s insurance. This is accomplished at closing by adding a certain amount to your escrow account. Your escrow account is money set aside that is not applied to your mortgage, but to bills associated with the mortgage (homeowner’s insurance, taxes, etc.). For example, at closing, your lender may require you to pay 5 months of your homeowner’s insurance premium into your escrow account. Your bank would take care of paying your taxes and your homeowner’s insurance premiums when they become due. This is an expense most people forget about and can increase your “closing costs” or additional fees by hundreds and sometimes thousands of dollars. The amount required to be paid at closing will vary based upon the amount of the insurance premium and the amount due for real estate taxes.
Notes
It is of importance to note that this list is not all-inclusive. In addition, who pays what is always negotiable. Sometimes a seller will agree to a “seller’s assist,” which is typically a percentage of the purchase price. Seller’s assist gives the buyers a “credit” which they can use towards closing costs. For example, if the purchase price is $100,000.00 and the sellers agree to a 3% seller’s assist, the buyer would have a credit of $3,000.00 towards closing costs. What this also means though is that seller will net less because they have given $3,000.00 to the buyer. Also, utilities (water, sewer, trash, etc.) are prorated as of the date of the sale. Therefore, this can result in additional money being due by the buyer if the seller has already paid in advance. For example, if the seller paid the quarterly water bill in advance, seller may be entitled to a refund or credit for the amount he or she paid which would result in the buyer paying the seller more that the purchase price at closing.