Closing costs, also referred to as settlement costs, is the collective term that refers to the fees and charges that a homebuyer and a seller are obligated to pay upon the closing, or settlement, of a home purchase. Usually, the buyer is the one that pays most of the closing costs. However, you may negotiate with the seller to shoulder some, or even all, of the closing costs.
Closing costs and the closing process can be quite overwhelming for both buyers and sellers, especially if this is your first time going through it. Closing costs in Tubac, Arizona will vary depending on a number of factors, such as the type of mortgage, realtor concessions, and other fees. Some costs are fixed while others are negotiable. In some cases, there are certain fees which can be waived altogether.
Common Closing Costs for Tubac, AZ Home Buyers
If you are planning to buy a house in Tubac, AZ, it is good to know ahead of time all the fees and charges that you will have to pay at closing, so you can prepare your finances accordingly. And although who pays what is often governed by local conventions, closing cost responsibilities are 100% negotiable – something you can use to your advantage. Here are some of the most common closing costs that Arizona homebuyers are responsible for:
Loan Origination and Underwriting Fee
This fee is charged by lenders for underwriting, or reviewing, loan applications. This amount that you will have to pay will be based on a percentage of the home’s purchase price.
Credit Report Fee
As part of your application, your lender will require a full credit report to establish what type of risk you present so they can accurately compute for your loan amount and interest rate. This usually costs around $25.
The lender would also require a current appraisal of the home you are buying to ensure that they are not lending more money than what the property is actually worth.
Home Inspection Fee
A home inspection is not required, but this can help ensure that there are no issues with the house that you are interested in purchasing.
An escrow company is a third-party provider that oversees the real estate transaction and keeps all the funds safe. The funds are distributed upon settlement.
Flood Certification Fee
Flood certification is the official document that states a property’s flood zone status. The fee is usually around $10.
Title Search and Insurance
The lender will perform a title search on the home you are buying to ensure that there are no property liens against it. The title insurance is your protection in case someone claims ownership over the property that you are buying.
Postage and Courier Service
Lenders that use a courier service to transport documents will pass that cost on to you. This cost varies by lender but is usually no more than $100.
Some lenders may require a property survey to ensure that the property you are buying conforms to local zoning laws. This fee usually ranges between $300 to $400 dollars.
Typical Closing Costs for Sellers in Tubac, AZ
The average closing costs for sellers in Tubac, Arizona ranges between 0.4% to 2.6% of their home’s sale price. Here are the typical real estate closing costs sellers should be aware of when selling their property.
The title insurance protects the buyer in the event that someone makes a claim against the home’s title that predates their purchase. In Arizona, it is common for sellers to purchase the owner’s title insurance policy. On average, the owner’s title insurance policy costs around $1,450, roughly 0.5% of the sale price.
Title Service Fees
Title service fees compensate the closing agent for managing the logistics of the real estate transaction. Generally, this would be a title company, escrow service, or an attorney. The fees range between $550 to $1,250, and it’s common for Arizona buyers and sellers to split these fees equally.
Your home purchase becomes part of public records, and the corresponding cost for this is a flat $30 recording fee which is implemented throughout the state.
Homeowners Association (HOA) Fees
When the property that’s being sold is subject to a homeowners association (HOA), the HOA board may charge a transfer fee once the title is transferred to the new owner. This fee is typically the seller’s responsibility. HOA transfers generally cost a few hundred dollars, but the actual amounts vary between communities.
Seller concessions refer to anything the seller has agreed to give the buyer in order to close the deal. Common concessions include lowering the home sale price, paying a portion or all of the buyer’s closing costs, and purchasing a home warranty.
More than 80% of home sellers in Arizona make at least one concession. As to what concessions an individual seller makes will vary depending on factors like real estate market dynamics and other considerations that may influence how much leverage they have when negotiating with the buyer.
Tips on How Arizona Homebuyers Can Save on Closing Costs
Closing costs can be a but daunting, especially for first time homebuyers, but there are a few things you can do to lower your out-of-pocket liability. For one, you may work with your real estate agent to negotiate some or all of your closing costs with the seller. In many home purchase transactions, the seller will agree to pay for closing costs to seal the deal.
You can also look into programs in Arizona that offer assistance with settlement costs. One such program is the Home Plus Mortgage which can help cover your entire down payment and closing costs in the form of a silent second mortgage. And, if you’re qualified, the VA or USDA loan requires no down payment, so your out of pocket expenses will be greatly reduced.
If you have plans of buying a home in Tubac, AZ, I will be more than happy to help! Feel free to call or text today at 520.245.9000 or send me an email at [email protected] to schedule an appointment.