When you enter into a contract to purchase or sell a home, you have probably already invested a great deal of money into the project. However, there are still important expenses to pay when the deal closes, which are collectively referred to as closing costs. But what exactly are closing costs, and how do you know what you are responsible for?
What Are Closing Costs?
Closing costs are the expenses that the buyer and seller pay when it comes time to close the real estate transaction. These include the various fees and expenses related to the transaction, as well as the costs of insurance and inspections. It also includes any taxes associated with the property’s purchase or sale.
What Closing Costs Are You Responsible For?
The exact costs you are responsible for are dependent on whether you are buying or selling, as well as how expensive the property you are purchasing is. As the buyer, you are typically responsible for recording costs, lender fees, survey costs, real estate taxes, homeowners’ insurance, a title search, and title insurance, as well as a 1% mansion tax for any properties valued at over $1 million. As the seller, you are typically responsible for real estate transfer taxes, as well as a 2% estimated income tax based on the value of the sold property.
What Should You Do?
A real estate lawyer can guide you through the process and help you understand the total costs you will face, including all closing costs. The sooner you contact them, the sooner they can get to work and ensure your transaction happens as smoothly as possible.
The New Jersey real estate lawyers at Riley and Gutman, LLC, are ready to assist you with your real estate transaction. We are committed to providing prompt, experienced and personal service to our clients, and will provide you with the legal support you need throughout your transaction and beyond. Give us a call at 731-431-0300, or visit our contact page for more information.