What are Closing Costs?

In the event that the buyer and the seller have both reached an agreement with regards to the home being sold, the next and final stage in the home sale process is the closing, which is also called settlement. During this stage, the buyer and the seller sign the final ownership and insurance documents and pay the fees that are due upon the settlement of the real estate sale, called closing costs, thereby making the buyer the legal owner of the house.

Typically, most of the closing costs are the buyer’s responsibility. However, closing costs are not always set in stone, and the buyer may negotiate with the seller to cover some of these costs. The fees and legal requirements are not the same for every state and municipality, so it is best for homebuyers to learn more about these prior to making an offer to the seller.

Average Closing Costs in Winston-Salem, NC

The closing costs in North Carolina range from 2% to 3% of the home price. This is relatively low compared to the closing costs in other states. Another advantage for homebuyers in North Carolina is, the state does not charge a mortgage tax. However, they will have to pay an additional fee for title insurance, since most lenders require this insurance policy to protect their interests in case of a title dispute.

Some of the closing costs are paid to the mortgage lender, such as fees for underwriting, processing, broker services, document preparation, origination points and commitment. Also included in closing costs is the home inspection cost, which is estimated at $350 to $500. The cost may be more if the buyer opts to avail of add-on tests, such as mold, radon, termite, and infrared inspections. While these inspections are not required, it is to the buyer’s best interest to have these performed prior to making their financial decision of buying a home. In addition, doing so may even help the buyer negotiate the asking price or repairs. The buyer will also have to pay for a credit report, appraisal, attorney, flood insurance, and survey.

Included in the buyer’s closing costs are property taxes, which are usually about 0.84% of the home value. North Carolina’s property taxes rank the 20th-lowest effective tax rates in the nation. After taxes, the next thing a homebuyer needs to consider is the homeowners insurance. The average cost of a policy in North Carolina is $1,117 per year, which is quite affordable compared to the rest of the nation.

Breakdown of Closing Costs in North Carolina