Home Buying in 07052>Question Details

Charles, Home Buyer in Piscataway, NJ

I am trying to buy a house in NJ. Who pays for closing costs. How much should one expect for that?

Asked by Charles, Piscataway, NJ Tue Nov 23, 2010

How do you go about negotiating for closing costs. Are closing costs the same as closing fees?

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Charles,

The term "closing cost" & "closing fees" have the same meaning and relate to those fees it takes to closes your side of the transaction, mainly the mortgage. as as noted in the last answer varies on when you close as a portion of your closing costs include escrowed mortgage and insurance payments.

Depending on the type of mortgage you are going for and equally the type of property you can ask for a certain amount of money towards closing costs, remember the seller also has closing costs as well and that may impact their answer.

If I can answer further feel free to reach out to to me.

Cordially,

John W. Davis Jr., VREP
RE/MAX Professionals

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2 votes Thank Flag Link Tue Nov 23, 2010
On average: 2% - 3% of the sales price is the closing cost.

Don't forget to get a home inspection.

Regards,
John Falco
FHA Home Inspections
http://www.fha-homeinspections.com
0 votes Thank Flag Link Wed Nov 24, 2010
Hello Charles, In answer to your question, that depends on the listing, in some cases the seller is generous and offers this as benefit to your for buying the property. In most cases you are responsible for paying your closing costs as an additional charge to your mortgage making it easier for you to come to the closing table with little to no money out of pocket. In order to calculate just how much that will be you will have to sit down with the person supplying your mortgage as they have all of your information and can explain it in more detail to you. Charles, although getting an idea from the internet may be helpful you really need to sit down and discuss the whole process with a professional as this is probably one of the biggest investments you can make in your life,. Make wise decisions, and get all the information and guidance you can to avoid what you see going on in the market with foreclosures. If I can be of further assistance feel free to contact my office.

Hazel -973-669-2600
Moore Real Estate
West Orange, NJ
moorerealestate@live.com
0 votes Thank Flag Link Tue Nov 23, 2010
Charles,

I have read all the answers you got so far and i am in full agreement with Debbie Rose regarding the Attorney as your representative. Purchasing a house is a very large investment, perhaps the biggest you will ever undertake and It's something you don't want to do without a review of a reputable Attorney that deals with real estate and will protect your interest. paying for an attorney is a small fee if the deal is not going anywhere they may save you much higher expenses. Unless you are a real estate attorney I would use one!

As to your question - Closeing costs regard to the costs pending on you as a buyer and indclude mortgage application fees, Attorney fees, Title search that will be ordered by your attorney or if not using an attorney by a title company, recording fees, escrow fees (up to 6 months of your taxes depands on the lender) and insurance (depands what type of home you buy, usually banks will require a full year in advance). There are other fees that may be included and are up to you such as inspection (there are many types of inspections available and the cost varies).

Closing fees connected mainly to your mortgage and you should consult a mortgage representative to find out what those will be depanding on your down payment and whethere or not you are paying PMI
(premium mortgage Insurace).

If you are purchasing your home without any Relaotr involvment please make sure that your mortgage consultant will lay down all the fees in advance.

As to negotiating the closing costs in your offer, yes it's possible to request this from the sellers but usually it means that you will have to make sure that again, the cost you ask are only for closing costs and not any other fees.

Many lenders put a cap on how much you ask for and again if you are working with a Realtor they will be able to give you all the information or make sure you are connected with a great mortgage consultant that will give you all this information regarding the various fees in davance.


I am sure you will find a great home in West Orange. If you are still in the hunt for a great Realtor or better of a team of realtors, to assist you, feel fee to check our website and invite us for an interview. It would be our pleasure to assist.

Good luck and great holiday wishes.

Sharon Abram and Karen Abramson
Sharonandkaren@prudentialnewjersey.com
0 votes Thank Flag Link Tue Nov 23, 2010
Hi Charles, there are a few ways to negotiate closing costs that are discussed here. Visit our site that focuses on West Orange, Maplewood and South Orange NJ, http://www.BevAndBobHomes.com for more information on the buying process and then give us a call so we can all sit down and discuss the many options you can take advantage of today.

Enjoy.
0 votes Thank Flag Link Tue Nov 23, 2010
ps Charles - FYI - "my" area includes West Orange - the area you're buying in..........so what I have explained to you, is what is customary and typical here.

There is a lot to absorb with so many people offering their opinions online - it can be confusing!

If you are planning to use an agent, they are truly the best source for the information you need.....and can sit down with you, and discuss in depth al lthe costs involved, as well as the entire homebuying process.

Good luck, and if I can be of further help, please let me know.

Debbie Rose
Prudential NJ Properties
0 votes Thank Flag Link Tue Nov 23, 2010
Using an attorney is not mandatory, true, but it is advised - you have to sign a NJ form called Opinion 26 stating that while you don't HAVE to hire an attorney, you are advised that having legal representation is recommended.

I have been selling real estate for over 25 years, and in MY area, , I have NEVER had a buyer or seller NOT use an attorney...nor am I aware of any transaction in MY area where attorneys weren't involved.

To use an attorney or not will ultimately be your decision.

As I mentioned - this varies greatly depending on where one is in the state - in this area, the NJ attorney review period is handled by attorneys . They also assist, and often totally handle, dealing with home inspection issues.

You asked for a list of costs involved, and leaving off the cost of an attorney would be leaving a big gap in what you may expect to pay.

Good luck!
Debbie
0 votes Thank Flag Link Tue Nov 23, 2010
Charles,

In regards to Debbie's comment below... even if you live in Central or Northern Jersey, it is not mandatory that you use an real estate attorney. I advise clients to have the cotnract reviewed, but that you don't have to pay an attorney for the full process. That could save you $500 to $750. I would be glad to explain more in detail. Overall, a title company can still do a closing in Northern NJ for no extra costs. I just wanted you to be aware of this.

Thanks,
jeff
0 votes Thank Flag Link Tue Nov 23, 2010
Charles,

First off, the very first answer by Mike is misleading and confusing. On a FHA loan, the seller can pay up to 6% for closing costs, not down payment. On a conventional loan, if you are putting les than 10% down, the seller can only pay up to 3% down. If using a USDA loan, it states reasonable closing costs.... and VA loans are 4% plus points.

So many have different ways to calculate costs and say x,y,z is typical. To me, that can be misleading also. It truly comes down to your property taxes (because in NJ 4 to 5 months will need to be escrowed) and it will depend on the lenders fees and if points will be charged. At lot of this will depend on the type of mortgage you choose and your credit scores. And yes, closing costs should be the same as closing fees. What you need to be careful when asking such questions to a lender, is what is the total monies that you will need besides the down payment. Why do I say this? Because some loan officers will just give you true closing costs, not to include pre-paids.. which in reality, is defined differently. And some will include the pre-paids as your closing costs. You need to speak to a loan officer that will properly educate you on such terms and the whole process. And some will argue that you can negotiate closing costs. If you can do this with a lender, it was because they charged you to much to begin with. Shopping for a mortgage is not like shopping for a car. Just my opinion of 18 + years in the mortgage industry.

If you have any other questions and or would like to talk about this in detail, please don't hesitate to contact me. jbelonger@ihmci.com or cell : 609-440-5133

Thanks,
Jeff
Area Manager
0 votes Thank Flag Link Tue Nov 23, 2010
ps - also know that property taxes will be escrowed (some part put up in advance and held by the mortgage company) - once again, the loan officer you work with will go over all these additional costs ...you will also need to pay upfront for home insurance.......
0 votes Thank Flag Link Tue Nov 23, 2010
Hi Charles - in NJ (northern NJ, anyway) we use attorney's for our closings. In parts of southern NJ , they use the title companies.

If you want, when you make an offer on a home, your agent can help you structure your offer to include closing costs, that will be paid by the seller.

Now, if you're paying your own closing costs - here's what to expect.

1. Depending on where you are buying, the cost of the attorney (paid separately by the buyer and seller) can run from $750-1250.

2. Another cost is for Title Insurance - this is paid by the buyer, and there is a formula, based on the sales price, to calculate the actual cost. Any title insurance agent or attorney can give you the exact number - you can even google it yourself!

(The sellers will pay a fee called the "Realty Transfer fee/tax" - that's their responsibility, as well as the real estate commission if their home is listed with an agent)

3. Another buyer fee is the cost of the home inspection (approx. $400-800 total) - this includes an engineering , radon and termite report. Other inspections may be performed, such as septic tank, soil testing where oil tanks are involved, mold testing if indicated, etc..........depending on the home and location.

4. There will be fees associated with obtaining a mortgage, but the loan officer will go over these costs.

5. There are also some misc. fees in regard to filing the deed , tax adjustments and even adjustments if there is a filled oil tank..........but all of these aditional fees are minimal compared to the ones mentioned above.

Hope this helps!

Good luck with your purchase!

Of course, if you have an agent, they should also go over these costs with you in detail.

Best wishes, and happy Thanksgiving!
0 votes Thank Flag Link Tue Nov 23, 2010
Charles there are closing costs for both the buyer and the seller. As a buyer you can negotiate to have the seller pay all or some portion of your closing costs. whether the seller will agree is a matter to be determined in the offer and negotiating process. This should be discussed with your real estate agent when deciding to make an offer to purchase. Best of luck.
Web Reference: http://www.GWalsh.com
0 votes Thank Flag Link Tue Nov 23, 2010
Closing cost an fees can be asked for the seller to pay for you in your offer to purchase. On a FHA purchase you can ask for up to 3.5% of the purchase price. Fees and costs are different from state to state as well as different title companies charge differently as well. I have written lots of purchase contracts asking for a seller to pay 3.5 to 6% of a buyers fees and costs to close.
Web Reference: http://www.mikekrieg.com
0 votes Thank Flag Link Tue Nov 23, 2010
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