How to Save on Portland Closing Costs
Is it possible to save money on closing costs? Absolutely!
If you’re a home buyer, Oregon is a great state to look at for some of the lowest closing costs in the nation. According to Bankrate.com, the average home sale closing costs in Oregon are 11th lowest of the 50 states. For a home purchased with a $200,000 loan, with 20% down payment and excellent credit, the closing costs average $3,509.
But what are these closing costs, and who pays them? Your Portland real estate agent can help you figure exact amounts, but keeping closing costs in mind as you start your home search or list your home for sale will help you avoid surprises on the closing day.
At the most basic level, closing costs are any costs associated with the process of transferring ownership of a home or property from one party to another. They fall into two categories: origination fees charged by the lender, and third-party fees which include everything from the home appraisal and REALTOR® commission to the postage paid to send documents.
As a buyer, most of the closing costs you’ll pay will be the ones associated with your home mortgage. Starting out with good credit and shopping around for the best loan can help you save money when you close the deal on your new home.
The two biggest third-party closing costs are usually REALTOR® commissions and title insurance. REALTOR® commissions are typically included in the price of the home and thus paid by the seller. Buyers’ agents often won’t charge the buyers for their services, they get paid by the seller. For home sellers, real estate agents are well worth the cost because they cover advertising the home for sale and negotiating between buyers, sellers, banks, and other intermediaries like attorneys and escrow companies. Plus, your home will sell faster and you’re more likely to get your asking price with a skilled REALTOR® on your side.
Title insurance, like home inspections, homeowners insurance, and other services that incur closing costs, is a legal necessity. Title insurance is an insurance policy against someone else claiming ownership of a home based on inconsistencies in the title record. Title search fees and insurance are usually paid by the seller, but it depends on the contract drawn up between buyer and seller. The mortgage lender may also require separate title insurance, paid by the buyer.
Your Portland real estate agent can describe the more minor closing costs involved in buying or selling a Portland home, and a good REALTOR® will be open and honest about the minimum amount you should expect to pay on the closing date. The most important point is to do your research and find an expert who can help you navigate the various services necessary to change ownership of a home.
Bankrate.com senior financial analyst Greg McBride puts it this way: “The main lesson of this [nationwide closing costs] survey for consumers is to shop around for at least three different estimates” for services like home inspections, title insurance, mortgages, and especially real estate agent commission fees . “It’s important for people to realize that there is variation even within their neighborhood, and that they can save by being an educated consumer,” says McBride. We couldn’t agree more.August 23, 2012