What to do about closing costs?

[Ezra Shami]

Hi everyone, this is just a general question that Id like input from people who have done this plenty of times. What should I do in regards to closing costs? I dont really understand them or how to pay them. When the time comes i will talk to my agent and lender but as of now i just want to understand basics and the best way to pay it with the least out of pocket money possible. Thanks

[Michael Dumler]

@Ezra Shami the general rule is that closing costs make up about 3-6% of the purchase price of the property. The closing costs and your down payment is your cash to close requirement and what you as the buyer will have to bring to the table at closing. Whenever working with a lender, ask for a loan estimate to get a disclosure on all of your closing costs/fees. Closing costs include a wide range of items such as an appraisal fee, survey fee, attorney fees, title search fee, escrow fee, mortgage insurance depending on the loan, HOA fees, title insurance, property tax, recording fee, etc. As you can tell already, closing costs are a big part of buying a property which brings up the importance of negotiating for seller concessions (seller pays part of closing costs) during the transaction. As an investor, it's important to includ closing costs in your analysis as well. Hope this helps!