Closing day is when Closing Costs are due and payable.
Closing costs are fees owed that are due on or by closing day that must be paid for a home sale to be complete.
To give you a rough idea of what to expect, some of the most common expenses are listed below.
The Brokerages’ Compensation
This previously negotiated fee covers all the legwork, marketing, advertising and advice provided by your Realtor and their Brokerage, as well as, covers Compensation paid to the Buyer’s Realtor and Brokerage, as the Seller typically pays for both sides.
Legal Fees and Disbursements
When you’re involved in a financial transaction as big as this, you want to be sure you are protected. Your Legal Professional will ensure that the Buyer has made good on all terms outlined in the Offer to Purchase, and that the Seller has met their legal obligations so the transaction may close. Legal fees vary widely, and the total cost depends on the extent of services provided and includes disbursements.
Utility and Property Tax Adjustments
Whether the Seller has pre-paid these expenses or not, all will be adjusted and calculated by the Lawyer through the Statement of Adjustments determining what is owed to whom.
Mortgage Prepayment or Discharge Fees
The best advice is to contact your Mortgage Lender if you plan to pay off your mortgage with the proceeds of the sale, as your bank may charge a fee for closing your account, and a penalty fee if you’ve paid it off early.
And don’t forget about your New Home! Be sure to budget extra funds for expenses related to your move, such as the Moving Company and Utility Hookups.