What Are Closing Costs?

What's up guys, we're back with another #AskAxe. Today, it's all about closing costs. I know a lot of you haven't bought or sold a home yet, and that can be surprising when you're going through the transaction. You thought that all you needed was the deposit, and then you get hit with $15,000 of fees at the close of escrow. So today we're going to go over those, what they are, and what they entail. So really basic information around closing costs are that they typically range from about 3% to 5% of the purchase price of the home, and that's in addition to the deposit, whatever that may be. Let's do a quick example. So let's say you're buying a million dollar property and you do it conventionally with a 20% deposit. So what that would entail is that at the end of your escrow, at closing, you would owe roughly $15,000 to $25,000. So that's three to 5% of your purchase price, depending on the specifics of your loan.

So in our example, the buyer has to pay these closing costs out of pocket. But as a seller, you can either pay them out of pocket or you can pay them from your proceeds and profits from the sale of your home, at the close of escrow. Pretty beneficial! So I know that was quick, but I was trying to give you kind of a basic overview of what closing costs are. If you have any additional questions, shoot me a DM, let's chat!