“Closing Costs”, “Settlement Charges” and “Funds Needed
to Close” are NOT the same thing!
There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract.
As your REALTOR negotiates the sales contract for you, I will advise them as to get the sales price you want, and limit the closing costs for which you will be responsible. Please ask me to explain the “real deal” behind “seller paid” closing costs. There might be surprises for you if you do not completely understand. Call me NOW if you are uncertain.
I will walk you through the closing costs, answering any questions you may have explaining which costs are decreed by law to be yours and which are negotiable.
All to often, people ask “what are my closing costs” when really what they want to know is “how much do I need at closing” and the answers are very different. Please see the equation below:
Closing Costs + Settlement Charges – credits = Funds needed to close.
Therefore, just knowing the closing costs is part of the equation and not real helpful for planning. Closing costs are one-time fees associated with the transaction, whereas Settlement charges include prepaid insurance, prepaid interest, setting up reserves for the escrow account and various other items.
Initial FEES WORKSHEET (the OLD Good Faith Estimate or GFE)
Buyers will receive a “Fees Worksheet” of closing costs, settlement charges, and funds needed to close shortly after the loan application is submitted. The estimate is based on our collective past experience and expertise, BUT still may not include all the closing costs. It is imortant to understand this document is prepared , in “Good Faith” and it is only an “Estimate”. While I attempt to make it as accurate as possible, it is a dynamic document and will be updated and sent to you periodically.
Please see the line by line explaination of the Good Faith Estimate in the link to the left.
