The closing costs on a real estate purchase or sale can add up considerably, regardless of which side of the table you will be on.
List the buyer closing costs that are required and selected by the lender. The lender must provide you with an accurate list and estimate of these charges.
An appraisal of the property is required by the mortgage lender in order to ensure that the loan amount is in line with the property's value. This appraisal is likely different from the tax assessor's appraisal.
Some lenders may charge you for fees incurred in pulling your credit report from the 3 major reporting bureaus. You can request a copy of your credit report, complete with score, for about $15 per bureau. Question your lender if their charge greatly exceeds this amount.
A flood certification is required by lenders in most cases, adding to the buyer closing costs. Your lender may require additional flood insurance if it reveals that the property in question lies within a flood zone.
A tax service fee is required when your mortgage payment will include an escrow account for property taxes and homeowner's insurance.
Government recording fees also vary by location and are paid to record your title with the appropriate government offices as part of your buyer closing costs.
Shop for the services that you have some control over and compare before selecting your provider.
A property survey is required for most real estate transactions. The survey shows you exactly where your property lines are. Most lenders and brokers can recommend reputable survey firms or professionals.
Determine the annual property taxes for your buyer closing costs.
Local property taxes can vary wildly due to the area where your house is located. You can get a history of the property taxes on the house from your real estate agent or from your city or county tax office.
Request estimates for your homeowner's insurance.
Your auto insurance agent may be able to give you a package discount if you add homeowner's insurance.
Homeowner's insurance should include coverage for loss of the building, personal possessions and contents and liability.
Compute the buyer closing costs needed for your initial escrow deposit.
Taxes are paid in arrears, but homeowner's insurance is paid in advance.
Your initial escrow deposit should include enough to pay for any taxes that will come due in the current year (less the seller's credit for unpaid taxes, if any), 2 months of property taxes and 2 months of homeowner's insurance.