Closing Costs For A Home Purchase

It's a customary practice for a home buyer in Santa Cruz County, AZ to request for seller concessions. In general, the home buyer must pay for certain home financing costs, but an agreement can be made between the buyer and seller where the seller pays, on the buyers behalf, a portion of the buyers closing costs. The total is usually around 2-3% of the house price, depending on what kind of mortgage and lender.
 
This is another reason why it's so important for a home buyer to obtain a loan pre-approval before starting to look for a home to buy. By doing so a home buyer knows whether or not they need to negotiate these fees and/or save up more money than anticipated. These closing costs are paid when the sales transaction closes. Bear in mind that there are a lot of costs that are traditionally paid by one party or the other. Set forth below a list of these charges: 

The Buyer May Pay

  • Lenders Policy of Title Insurance
  • Endorsement fees for Title Insurance
  • Escrow Fees (50%)
  • Interest on New Loan
  • All New Loan Charges (appraisal, origination and discount fees, document, preparation)
  • Termite Inspection Fee
  • Hazard Insurance Premium for First Year
  • Impounds (hazard insurance & property taxes)
  • Prepaids (hazard/mortgage insurance, property taxes, special assessments)
  • Delivery Fees
  • Recording Fee (50%)
  • Homeowners Association Dues Required by the Association for Future Months

The Seller May Pay

  • Owner’s Policy of Title Insurance
  • Homeowners Association Fees
  • Real Estate Commissions
  • Escrow Fees (50%)
  • Payoff All Existing Loans, Liens and Encumbrances,
  • Taxes Due and Payable or Back Taxes
  • Recording fee (50%)
  • Delivery Fees
  • Septic Inspection if Not on Sewer
  • Termite Treatment if Needed
  • Lender Required Repairs

Additional Negotiable Costs

Below is a list of costs involved in a transaction that are negotiable and there is no general tradition as to which party pays them:

  • Home Warranty
  • Homeowners Association Transfer Fees
  • Septic Transfer Fees
  • Water Well Transfer Fees

Seller’s Concessions Negotiations

The Arizona residential resale purchase contract includes the following verbiage for seller concessions negotiations:
 
  • Seller Concessions (if any): In addition to the other costs Seller has agreed to pay herein, Seller agrees to pay up to ________% of the Purchase Price or $_____________for Buyer’s loan costs including pre-paids, impounds and Buyer’s title / escrow closing costs.

 

Mandatory Costs

FHA AND VA regulations require the seller to pay the following fees in an FHA or VA transaction, if applicable: assignment fee, flood certification fee, bring down endorsements, document preparation fees, photo/inspection fees, tax service contract, warehousing fees, or any other loan cost or charge except the following: prepaid interest, impounds on new loan, loan origination, loan discount fees or appraisal. In addition, on a VA transaction the seller is required to pay the entire escrow fee.

 

Related Resources

ESCROW AND TITLE INSURANCE

Once the buyer and seller have reached an agreement, the signed purchase agreement, along with the buyer's earnest money deposit, is submitted to the title company and escrow is opened.