Understanding Closing Costs

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Closing costs in a real estate transaction are the fees paid by the buyer and seller at the closing table. In South Carolina, the buyer’s closing costs are typically 3-4% of the sales price; the seller’s closing costs are usually about 1% of the sales price. Here is a breakdown of the most common closing costs for buyers and sellers.

BUYER CLOSING COSTS

  • Items payable in connection with the loan: origination charge; points; appraisal fee; credit report; tax service fee; flood certification
  • Items required by lender to be paid in advance: daily interest charges; mortgage insurance premium; one year’s homeowner’s insurance premium
  • Reserves deposited with lender for your escrow account: 3 months of pro-rated homeowner’s insurance and 6 months of pro-rated property taxes
  • Title charges: title search; attorney fee; lender’s title insurance; owner’s title insurance
  • Government recording and transfer charges: fees charged by the government to update property records with the new owner’s name on the deed and the mortgage

SELLER CLOSING COSTS

  • Attorney fee
  • Deed Stamps (also called transfer taxes)
  • Pro-rated taxes from the day of closing to the end of the calendar year

The seller’s fees also include real estate commissions for the seller’s agent and the buyer’s agent. Commissions are negotiable. In the Charleston market, commission rates range from a limited-service flat fee, up to 10% of the sales price. The agents usually share the overall commission.

In some markets, it’s customary for the seller to also pay the buyer’s closing costs. Whether you’re a buyer or a seller, your REALTOR® will be your guide on when it’s appropriate and how to negotiate these fees.

If you’re thinking of buying or selling, call me at 843-870-0890 to get started.