Is about 9% of purchase too high for closing costs?

[Jessica Lamont]

We are doing a hard money 12 month loan for a fix n flip and our closing costs are over $10,200. Purchase price is $121k. Is this standard for hard money or too high? 

[Jeff Copeland]

What are you lumping in with "closing costs" to come up with this number? Without knowing this we can't answer your question. A buyer's closing costs typically consist of:

Lender and loan origination costs - Are you paying an origination fee, points, doc prep, or other fees to your lender? These should not come as a surprise, as you would have agreed to these terms in advance. 

Transaction related costs - You have to pay for transfer taxes (sometimes called doc stamps) on the deed, title insurance, title search, attorney fees, courier services, and other fees related to the title work and/or associated with actually closing the transaction. 

Tax prorations - Depending on the time of year and the date of the closing, the property taxes for the year of closing year typically get split between the buyer and seller based on the number of days of ownership and whether or not the taxes were already paid. For example, for a closing that took place on 10/31, the seller would be responsible for ten months of the property taxes (January through Oct), while the buyer would be responsible for two (Nov and Dec). Whoever actually ends up paying (or already paid) them would get a credit at closing, and the other party get a debit at closing. 

Impounds or prepaids - These are not really costs associated with the loan or the closing itself, but they do sometimes require cash at closing. The buyer often prepays things like several months' worth of insurance premiums or property taxes at closing, and in some cases these are held in escrow by the lender to be paid when they become due. Whether or not your lender is escrowing these funds and paying them for you will depend on the lender and the loan details.