How much should you plan for Closing Costs??
The closing costs for a home or condo purchase in Southern Nevada are not that hard to figure. This is always a fun topic because there are many variables that need to be included to get the exact number. We will do our best to help cover the basics.
What information do you need to know?…
#1. Contract Sales Price- This is needed to get the monetary figures for your closing costs for your Southern Nevada condo or home.
#2. Closing Date- This is needed to do all prorations of taxes, insurance, home owners associations dues etc.
#3. Commissions- Generally the real estate commissions on Southern Nevada condos and homes are paid by the seller. If the buyer does agree to pay a commission to his/her Nevada Realtor it needs to be in writing and is normally done on a Buyers Broker Agreement form.
#4. Lender Fees- If the buyer needs a loan, they need to find out what it is going to cost them for this service. All lenders are required by law to give a truth in lending statement disclosing fees to assist buyers to “shop” rates with other lenders. Don’t look just at the loan origination fee (which is many times around 1%). You should also know if they are going to charge any Appraisal Fees, Credit Report fees, lender inspection fees, lender processing fees, lender administration fees, etc, etc… This can add up to a BUNCH. If you are unsure of a good lender ask your Southern Nevada Realtor, they may have experience with a few lenders and could recommend them.
#5. Title Charges- Typically with Southern Nevada condos and homes the settlement or closing fee is split 50/50 between buyer and seller. This does not mean that ALL title company related fees will be split!!! The Owners Title Policy which assures the new buyer clear and free title to the property is typically a seller expense. If the Buyer is getting a loan the lender may require a Lender’s Title Policy at the buyer’s expense. Also include here are any other title or government recording charges like the fee to record the document with the recorders office.
#6. Other Fees- An example is in Clark County Nevada there is a county transfer tax of about ½% that is typically paid for by the seller. Also if you are in a home owners association you may have a fee to transfer the new buyer to the home owners associations records. This also is typically at the seller’s expense. This does vary and is recommend that you check with you Southern Nevada Realtor.
#7 Home Warranties and Home Inspections- Generally Home Warranties can be paid for by either buyer or seller and are negotiable. Home Inspections and Termite Inspections are not mandatory for a cash purchase. They can however be mandatory for a home that is getting a loan… in which case usually it is paid for by the buyer. We strongly recommend using a Southern Nevada Realtor to assist you in giving you advice, guidance and council with you real estate questions. Southern Nevada condos, homes, and townhomes may look good on the outside, but with out the proper inspections a buyer could really get more than they bargained for.
Closing Costs- Rule of Thumb
if you are purchasing… (acting as the buyer for) a Southern Nevada condo, home or townhome with cash your closing costs typically run about ¼ to ½ for a percent of the purchase price. If you are getting a loan plan on 2 to 3% of the total purchase price to cover your closing costs, lender fess and title fees. Sometimes a lender may allow you to roll the lenders fees, title fees and other closing costs into the mortgage of the home.
If you are selling… you should plan on about 1½% on top the price or percentage commission paid to your Nevada Realtor for listing and selling your Southern Nevada condo or home. For example you are to pay a 7% total commission to your Nevada Realtor, to be split equally between the selling agent(listing agent) and the agent that brings you a buyer. In this example your total closing costs would be in the neighborhood of 8½% of you total purchase price. This will pay for the Settlement fee, Owners Title Policy, County Transfer Tax (in Clark County), commissions, prorations for taxes, insurance, HOA etc. Please note- the 1½% is based on the seller not paying any of the buyers closing costs, appraisals, inspections, etc.
This is not intended to be a comprehensive list. It is intended to give you an idea of some things to ask your Nevada Realtor about prior to closing. No one enjoys surprises at the closing table so it is best to address all issues before hand. We would be happy to discuss this further with you if questions arise.
This article was written by the Mesquite Real Estate Team from Bowler Realty. Bowler Realty specializes in property in Southern Nevada and North West Arizona.