By Melodye Colucci
Dec 9, 2012
Q: What comprises closing costs when one is purchasing a property, and is there any way to cut down on them?
A: Closing costs for purchasing a property are two-pronged.
The buyer is responsible for pre-paid items, followed by a one-time closing fee. Pre-paid items are determined by adding eight months worth of taxes, pre-paid taxes and escrows. Buyers pay taxes in advance and the bank is allowed to hold one-sixth of the buyer’s taxes and insurance. The one-time closing fee includes the bank and origination fee, appraisal, a credit report, condo questionnaire for those who are purchasing a condo, attorney fee, settlement fee, title search, title insurance policy and recording fee.
Closing costs for selling a property are determined in a slightly different way, but are just as significant. The fees incurred with selling are real estate commissions, city and state conveyance taxes and the attorney fee.
It’s always best prior to your search or sale to have all these figures in advance to determine how much money you will need to set aside.
— Melodye Colucci, William Raveis Real Estate, 203-322-0200, melodye.colucci@raveis.com
