The purchase price you offer for a residential property isn’t the final amount you will pay. You will have to combine the purchase price with all of your closing costs, which could potentially be more than $10,000.
Your closing costs include title insurance, mortgage fees, escrow deposits and even recording fees to have your new deed made part of the public record. Many of those closing costs are expenses that you cannot avoid.
Who has the ultimate responsibility to pay for the closing costs during a real estate transaction?
Buyers typically cover most closing costs
The real estate market in Massachusetts is quite hot right now, which means that buyers have to compete to secure properties. This kind of market is known as a seller’s market because it is far more beneficial to list your property right now than it is to buy one.
Sellers may be able to pick between multiple offers on their property, meaning that they don’t need to make any concessions. During a slow-moving market, buyers can sometimes convince sellers to pay some or all of the closing costs. However, asking the seller to assume these expenses won’t make your offer come off as very competitive. Currently, buyers can expect to pay most of the closing costs themselves.
The seller will typically have to pay the real estate agents’ commissions out of the proceeds from the sale. Beyond that, the seller might pay the buyer’s title insurance premium. Any other costs are expenses you would have to specifically negotiate, which may make your offer less competitive.
Understanding that you need to pay closing costs in a residential real estate purchase can help you be more reasonable about the price that you offer for a property.