Most people only think of the costs directly associated with the property when buying or selling a home. It makes sense since the major costs are the down payment and monthly mortgage payments. However, several fees come with any real estate transaction. You must account for these fees when buying or selling a home.
This post will explore the standard fees that come with real estate transactions.
Northern Virginia Real Estate Market Watch
As of this writing, the median price per square foot of homes in Falls Church was $369. However, real estate trends are always changing. If you need help buying or selling a home in Northern Virginia, click here to contact our team.
Common Real Estate Transaction Fees
Loan underwriting is the process a bank follows to assess a loan. They check a person’s credit and income to ensure they can pay. They’ll also order an appraisal for the property and verify your down payment.
Loan Origination Fees
An origination fee is another charge from the lender. It is like a commission. Part of the purpose of an origination fee is to cover the administrative costs of issuing new loans.
Lenders use the property as security for a mortgage. To protect their investment, lenders require buyers to have a title examination to check for ownership disputes, liens, back taxes, and defects. It ensures the title is clear for sale. A title examination is also part of obtaining title insurance for the loan.
Escrow accounts may be necessary for various reasons. The account might hold the buyer’s good faith deposit until the closing. Some loans might require an escrow account for mortgage insurance and property tax payments. These fees cover the services of the escrow agent.
You need to have the local government record the transfer of title for the change in ownership to be official. The recording fees are normal administrative costs most local governments charge for these services.
Real Estate Commissions
Very few transactions occur without the assistance of real estate professionals. Real estate agents charge commissions as compensation for their work. Fees can vary depending on the transaction and location. The average home sale has a total commission of 5-6%. However, that is the total for both agents.
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