Whether you are selling or buying a home, apartment building or vacant land, there will be closing costs associated with the transaction. That is, money due over and above the cost of the property. Closing costs are fees or charges imposed by certain 3rd parties – entities other than the buyer and seller – who provide services necessary to protect your interests and complete (close) your transaction.
Who are the Service People in an Austin Real Estate Closing?
- Typically, title insurance companies, escrow companies, lenders, attorneys, tax authorities, home warranty protection companies
- Often, home inspectors, termite inspectors, pool inspectors, surveyors, arborists…..
- Sometimes, structural engineers, roofers, foundation, electricians, plumbing, HVAC or environmental health specialists
What do Service People do to Facilitate Closing?
- Title Insurance — Insure your rights of ownership (title) against adverse claims
- Escrow — neutral party who provides for a fair, equitable transfer of property from one party to another, and accounts for the distribution of all monies
- Lender — funds buyer’s mortgage financing
- Attorney — prepares the legal documentation
- Tax authority — collects property taxes and, if required, transfer taxes
- Home Warranty Protection — warranty company that repairs or replaces certain malfunctions
- Home Inspectors — evaluates the home’s components and systems
- Termite Inspectors — evaluates the presence of termites, dry rot (fungus), beetles
- Pool Inspectors— evaluate the condition of the pool and pool equipment
- Surveyors — determines, locates and defines land boundaries
- Arborists — evaluate health condition of trees and foliage
- Structural Engineers — ensures the safety of the frame work or skeleton of buildings.
- Roofing, foundation, electrical, plumbing — evaluate specific components
- Environmental health specialists — determine presence of mold, allergens and toxic substances
- HVAC — these systems are crucial for every home like air conditioning and heating
Who Pays Closing Costs?
- The law does not mandate which party pays for which item
- Closing costs are allocated between buyer and seller
- Closing Costs are negotiable between the parties
- Party responsible for payment is usually determined by local custom
- Buyers will pay for any inspections or evaluation they deem necessary
- Pre-sale inspections ordered by the seller will be paid by the seller
What is the Custom for Who Pays Closing Costs in Austin?
In Austin, the custom is the seller pays for the owner’s title policy and the buyer pays for the lender’s title policy, if they are getting a loan. With our competitive market, we are seeing buyers sometimes offer to pay the owner’s title policy as a way to get the seller to accept their offer. Usually, buyers and sellers split the escrow costs, which are the transactional costs of closing the transaction at the title company. Buyer, unless negotiated otherwise or prohibited by the lender, pays all fees required to get their loan. Seller, unless otherwise negotiated, pays for a home warranty.
Looking to Buy a Home in the Austin Area?
Our team of buyer’s agent specialists know how to listen to learn exactly what you’re looking for in your next home. We will also make sure you see everything that’s available in the most efficient manner possible to save you time. When you find the house, we will show you how to evaluate the Austin real estate market and use the data in your favor to negotiate the very best deal you can. We are also trained to watch out for things that can hurt you or cost you money in the future. For more about how our buyer’s specialists are especially trained to represent you (for free!) on your next purchase, check out our Austin Home Buyer Representation Program. Then, call us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.