What are closing costs?

Closing costs refer to the fees and expenses that are required to finalize a real estate transaction, which are paid at the closing of the deal. These costs can include various items such as loan origination fees, title insurance, appraisal fees, and recording fees among others. They are essential for the completion of the sale and are typically encompassing of both buyer and seller expenses related to the transfer of ownership.

Understanding closing costs is crucial for buyers and sellers as they contribute significantly to the overall expenses of purchasing or selling a property. These costs can vary widely depending on various factors including property location, type of loan, and specific terms of the sale, making it essential for parties involved to budget and plan for them accordingly.