Real Estate Closing FAQs
What closing costs should I expect in a FSBO transaction?
When considering a for sale by owner (FSBO) transaction, there are several closing costs to be aware of. These closing costs include title insurance and fees for the escrow or closing agent, as well as transfer taxes, recording fees, survey fees, home inspection fees and other miscellaneous expenses.
Who pays for what expense is governed by the terms of your purchase agreement. Your purchase agreement also dictates how or if taxes are prorated and under what proration method. If a buyer is taking out a mortgage loan, there may be additional mortgage loan closing costs they would be responsible for.
The terms of a purchase agreement are negotiable between buyer and seller. Sometimes one party may agree to assume all closing costs, and other times they are in accordance with local practice or tradition. In some cases, a buyer may request that certain closing costs are covered by the seller. It is important to consult professional legal counsel when drafting or agreeing to provisions of a purchase agreement.
By being aware of all the closing costs associated with a FSBO transaction, you can ensure that your process runs smoothly and successfully for both parties involved. If you provide a title company with the purchase price and any amount of a loan being obtained by the buyer, they can traditionally provide you with a fair estimate of traditional closing costs.