First Time Home Buyer Closing Costs Charleston SC
If you are thinking of buying a home for the first time, then one thing you are probably wanting to know more about are first time home buyer closing costs Charleston SC. Just what are closing costs, and how much are they?
Closing costs are charges associated with the closing of the purchase. Once you and the sellers have accepted an offer from you, then you have what is known as a Ratified Contract.
This means that all parties are in agreement with all terms of the contract, and the process of the home becoming yours has begun.
This process is known as closing, and once all the necessary steps are completed, you then go to the closing to make the transfer of ownership official.
The closing process includes required inspections to be performed, agreed upon repairs completed, and necessary paperwork completed. Some of the paperwork includes the lender signing off and giving final approval for the buyer’s loan and the attorney doing the necessary research on the home’s title.
The attorney must make sure there are no issues with the title–if there are any issues, then steps must be taken to provide a “clear title”. Ownership cannot be transferred from the sellers to the buyers without a clear title.
That is a simple rundown of the closing process. There is more involved than that simple explanation, but that is a blog post for another day. However, for all the people involved in closing a real estate transaction, they have to get paid. That is where the first time home buyer closing costs Charleston SC come in.
Closing costs cover the fees for the mortgage lender, the closing attorney, the real estate agents, as well as taxes, title insurance and a wide range of other costs associated with the process of closing. These fees are usually 3%-4% of the total purchase price, or about $3000-$4000 per every $100,000 of purchase price.
If you are looking to buy your first home it is a good idea to save up some money. It will be needed for your down payment, as well as earnest money deposit and appraisal and home inspection. Many buyers mistakenly believe that they need at least 10%-20% for down payment, but that is not true. I covered this in a past blog post in greater detail.
I also created a short video that explains how much money a first time buyer in Charleston SC should have saved up for the purchase of their first home. So, in addition to the money needed to cover these expenses, there needs to be an additional 3%-4% saved up as well for closing costs, right?
Not necessarily. First time home buyers can negotiate to have the sellers pay for their closing costs. This is fairly common with first time home buyers in the Charleston SC area. Asking for closing costs can weaken your negotiating power a little bit, meaning you might have to offer a slightly higher price, or sacrifice a small concession or two. However, this by no means is a deal breaker, and something most sellers are prepared for.
One important note about seller paid closing costs. The closing costs are due at the closing table, so these costs are taken from the seller’s proceeds. In order to cover this, the buyer will take a loan for the full agreed upon purchase price, and the seller will pay the closing costs from this amo unt.
So, in essence, while the seller is paying the costs at the closing table, they actually net less than the purchase price. What ends up happening is the buyer basically is rolling the closing costs into the mortgage. However, this means the buyer does not have to come up with the money out of pocket for the transaction to be completed.
If you have any questions about first time home buyer closing costs Charleston SC then feel free to leave me a comment/question below. If you or anyone you know are looking at buying their first home in the greater Charleston SC area, then bee sure to send them to my website.