Home Buying in Denver>Question Details

Michael J. B…, Home Owner in Denver, CO

What are average closing costs in Denver as a percentage of sales price (excluding agent's commission)?

Asked by Michael J. Ballou, Denver, CO Thu Dec 12, 2013

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If you are the Seller, average closing costs will be 1% plus commissions or legal expenses. If you are the buyer, average closing costs start around $1300 on a $200,000 purchase + pre-paids (tax, HOA escrows). Closing costs on the buyer side can go as high as 2.5% of the purchase price. There are no commission expenses (99% of the time) on the buyer side.
1 vote Thank Flag Link Thu Dec 12, 2013
I usually tell my clients between 3-3.5%
0 votes Thank Flag Link Thu Dec 19, 2013
This time of year, count on paying at least 11 months of property taxes, a title insurance policy (roughly .5% of the the home price), $175 for the closing fee, $250 for HOA transfer, and toss in another $500 for misc title fees.

Obviously, listing commissions can vary wildly, from 6% down to the companies who offer to list for a flat fee. Using a discounted listing agent isn't necessarily a bad thing, but you should be extremely wary of using any discounted lister who offers the "buyer's agents" a flat fee, rather than a percentage. There are a few companies in Denver pushing this listing model now.

To unwary sellers, it sounds like a fantastic deal. What seller wouldn't want to pay a flat $3000 fee, as opposed to a full 2.8%? The problem is... offering buyers agents a $3000 flat commission to bring their buyers to see your home, isn't very appealing when they could show their clients almost any other home out there and make 2.8%. As a result, the majority of buyer's agent will avoid showing your listing. Many will simply tell their clients that the house is already under contract, or that it has issues, etc, to avoid showing it. As a result, homes listed with a flat fee co-op offered... end up sitting on the market much, much longer. The sellers also typically end up having to take several major price reductions, before they can get the home sold.

So, bottom line... the flat fee listing commission often ends up costing the sellers money when its all said and done, because the home's price ends up being dropped so much to get it sold.
If you're going to use a discounted listing agent, find one who only discounts their side of the commission, and offers a competitive co-op to the agent bringing the buyer. That way, you don't make your home "one to avoid" in the eyes of all the buyer's agents out there.
0 votes Thank Flag Link Sun Dec 15, 2013
Unlike the real estate agents on here, I have no horse in this race. However, I have had friends use Trelora with great success (Trelora is one of these new real estate brokers that offers to sell your house for a flat fee of $3000, which is heavily discounted from the percentages you see on here). Brokers regularly use these scare tactics where they talk about "other realtors" (no, definitely not themselves, though) who won't show their clients homes that are listed by Trelora. Well, that shows you everything that is wrong with the old model -- the realtors' incentives are not aligned with their clients' interests, and they serve their own needs rather than their clients. Check out Trelora or any of the other organizations who are breaking down this outdated model.
Flag Fri Dec 27, 2013
Mr Ballou:
Depends on whether you're the buyer or the seller. I tell buyers to plan on 1.5% minimum. With the new option of choice regarding who pays for title insurance, numbers on both sides can now vary since title insurance is a major percentage of these costs excluding Realtor fees.
0 votes Thank Flag Link Thu Dec 12, 2013
Michael,

Go to http://www.realeasynumbers.com. It's a great free program that calculates closing costs for any situation, for both buyers and sellers, in different states.

Good luck,

Marina Bay/Realtor
Cherry Creek Properties
0 votes Thank Flag Link Thu Dec 12, 2013
I can only speak for my personal closes, but I would say a 3% figure would get you a close estimate.
0 votes Thank Flag Link Thu Dec 12, 2013
The following is an excellent overview concerning closing costs from a peer broker in the Denver area. Of note closing costs can vary due to location of closing i.e. Denver versus suburbs as well as time of year of closing due to taxes paid in arrears by seller and taxes escrowed by buyer.
0 votes Thank Flag Link Thu Dec 12, 2013
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