When a property is sold, there are various closing costs associated with it. The costs are paid either by the seller or the buyer. The determination of which party pays which fees differs from county to county.
Some examples of standard fees include:
- Escrow Fees
- Lender Origination Fees
- County Transfer Tax
- City Transfer Tax
- Broker’s Sales Commissions
Let's explore some of these fees. Lender origination fees are usually paid by the borrower or the buyer, but sometimes these can be negotiated between buyer and seller, as the seller might be asked to issue a credit toward closing costs, instead of a reduction in price.
The seller pays for county transfer taxes in my county, and the city tax varies from city to city. In San Mateo, for instance, the city transfer tax is split 50/50 between buyer and seller.
Commissions are typically paid by the seller. However, sometimes per agreement between the buyers and their agent, an additional percentage may also be paid to the buyer’s agent.
Confusing right? Not really. Just know that there are local standards, and you should inquire about what your closing costs will be. You should also know that the fees paid at closing are also terms that can be negotiated.