Not many soon-to-be homeowners consider closing costs while looking for and eventually making an offer on the home of their dreams. Whether you are looking in Miami or Maui, it is important to understand what these costs include and what areas of the country have the highest and lowest average closing costs. To learn more about the home buying process or to get help with your next purchase, visit Arturo R. Alfonso, P.A. online today.
What Do Closing Costs Include?
Closing costs refer to the many different costs and fees homeowners must pay for when they close on their new home. Usually, they will run the buyer between three and six percent of the total cost of the home. These may include several different things, depending on the home and its location within the country. In general, closing costs will include the following items:
- Title insurance
- The first year of homeowner’s insurance
- The first six months of property taxes
- Real estate attorneys’ fees
- Home appraisals
- Other taxes
- Mortgage fees and expenses
- A closing/escrow fee
In some cases, a motivated seller will offer to cover a buyer’s closing fees. However, this is most often the case when there is a “buyer’s market.” In these situations, a seller may offer to do this to keep the buyer interested and increase their chances of making a sale. However, they probably will not agree to do this in a “seller’s market,” where they probably have many interested buyers, and therefore, the upper hand.
Which States Have the Highest Average Closing Costs?
As of 2016, the states with the highest average closing costs included:
- New York
- North Carolina
- South Carolina
The fact that Hawaii and New York are the two states with the highest average closing rates in the country probably does not come as a surprise, but many people may find it hard to believe that states known for their lower cost of living, like Delaware and the Carolinas, have some of the highest average closing costs, as well!
Which States Have the Lowest Average Closing Costs?
The states that have the lowest average closing costs may also surprise you! As of 2016, the top five states with the lowest rates were as follows:
- South Dakota
It is probably not surprising to you that South Dakota, one of the least populated states in the country, made this list. However, many find it shocking that Pennsylvania, one of the most populated, is at the number one spot!
Closing costs are often one of the most forgotten expenses that homeowners must consider when purchasing a new home. Many do not understand what exactly these expenses and fees cover, and some wrongly assume that the seller will always pay for the closing costs. If you have questions about the cost of closing in Miami or any other questions related to real estate, contact the office of Arturo R. Alfonso, P.A. today to take advantage of our real estate law services!