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2009-11-10 20:55:35
Typical Colorado Closing Costs

First, what are closing costs? Closing costs are a variety of costs (fees, prepayments, and down-payment) that are required to transfer title from the seller to the buyer. I will break down how these fees are typically spread out below. Keep in mind when you are purchasing a home, condo, or townhouse that closing costs are typically between 3% to 5% of the sales price of the property. This 3 to 5% is in addition to the down-payment (typically 3.5% for a FHA loan and 20% for a conventional loan). For example, if you were to put down 3.5% for a down payment with  a FHA loan, you would need an additional 3 to 5% for closing costs. However, you can always ask to split or have the seller pay for most of the closing costs! Also, keep in mind that closings are different in every state. Below are some typical closing costs for Denver Colorado:

Appraisal Fee: Can be paid by buyer or seller. Even if it is paid by seller, buyer typically pays the fees at the time of the appraisal and is reimbursed at the time of closing.

Brokerage Commission:This is a sellers expense 99.9% of the time. Seller typically pays both the listing agents commission and the buyer agents commission (co-op). Fees for the brokerage commission range depending on the brokerage firm and the specific real estate agent.

County Recording Fee: A fee the county collects for recording the documents.

Credit Report: Fee associated with lender pulling buyers credit score.

Discount Points: These are optional but paid by the buyer to the lender if buyer chooses to purchase them (you may ask for seller to pay for them). Points are charged by the lender to 'buy down' the interest rate. One discount point equals one percent of the loan principal.

Document Preparation: This is part of a lenders fee to the buyer for handling the paperwork associated with the loan.

Home Inspection: *Note: This is not an actual closing fee because buyer pays for this before closing.*  Home inspections are optional in Colorado, but are extremely valuable and should be done on EVERY transaction (even new homes).

Home Warranty: This is optional and may be paid for by buyer or seller. This is a warranty on major household items for a year after the purchase of the home.

Origination Fee: This is typically 1% of the loan amount and is paid for by the buyer. This is a lenders fee for originating the loan.

Pre-paid Items:

                     Loan Interest: Interest pre-paid from the date of closing to the end of the month.

                     Property (Homeowners) Insurance: A full year of property insurance is pre-paid at the time of closing.

                     Property Taxes: Buyer pays taxes into an escrow account for taxes at time of closing

                     HOA (homeowners Association Fees): Buyer pays a fee to equal the amount of time he/she is going to be in the home. For example, if the new buyer moved in on November 1 the new purchaser would pay for November and Decembers HOA dues.

Real Estate Closing Fee: This 175.00$ fee is typically split between the buyer and seller.

State Documentary Fee: A charge by the state of Colorado of one penny per thousand dollars.

Title Insurance: A fee for obtaining title insurance which is required by lenders.

Zach Otten

Metro-Denver Realtor, Keller Williams Executives

303-888-6101

 
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