Wherever you are buying a house or home, there will be no escaping the closing costs involved in completing your real estate purchase. So, knowing that such costs will be due will help you to budget for the full cost of purchase.
As part of the state of California, San Francisco offers both commercial and cultural benefits to real estate buyers looking to settle down or invest there. The opportunities are well worth the costs associated with such a relocation.
Because San Francisco is considered one of the more expensive cities to live it does, however, make it more important than ever to know what all the closing costs are and whether it is the buyer or seller who pays them. So, visit https://sanfranciscopremierhomes.com, and also study this article.
Definition of What Closing Costs Are
To be sure that we all know what closing costs are, it is worth a definition. These are the expenses that are on top of a property’s selling price. They are incurred to complete a house sale and something that usually both buyer and seller will have to stand in different proportions. It pays to know how much extra money will be required to purchase your dream home and so just what kinds of percentages are involved. If not percentages, categories of closing costs, which we shall explore here.
Extra Costs Payable with a House Sale
Title or attorney fees will be payable. These are costs incurred in making sure that a seller of a property is in a position to transfer the property’s title or deed to a buyer without any issues ending up attached to that property. There will, for instance, be title search and insurance fees involved in this process. The cost of registering ownership at a courthouse will be included in this. Appraisal and survey fees will be incurred to confirm the fair market price for the home. These fees will vary but are likely to run into several hundreds of dollars.
It is important to have private mortgage insurance, also known simply as PMI. If your down payment or deposit is lower than 20%, you may well need to pay for PMI to protect the lender from losses should you be unable to repay the loan. Often, the first year of homeowners insurance will be paid at closing.
Property tax equating to six months of advance tax will be paid on closing. These taxes depend on location. They will be what is assessed annually by the Office of the Assessor-Recorder. In San Francisco, the secured property tax for the fiscal year 2021-22 is 1.18248499%.
Attorney fees can often be bundled into closing costs but will be a significant part of house buying.
A fee will also be payable to an escrow or closing agent in exchange for helping you close. This is likely to vary depending on the purchase price of your home. So, it is something to factor into your decision about how much you can afford to pay as the purchase price of a home.
Loan origination fees will be those fees to do with underwriting and processing the loan. The lender will, during the underwriting process, check to see if you are in a position to repay the loan. This will be based on many factors including credit history. The fees on this will vary and go to the lender.
Who Pays for What?
In truth, the buyer will pay for most of the closing costs concerning a contract made between buyer and seller when it comes to purchasing a home. There are, however, instances when a seller will pay some of these closing costs. But then, that is only likely to be reflected in the purchase price that the seller agrees to in exchange for their house.
So, it is worth checking just which costs will become your burden as a house buyer and whether they are in effect already included in the purchase price. Those that are not will become the final cost of moving.
To conclude, you hopefully now have a greater understanding of what is meant by closing costs and so what they will mean to you as someone buying a home in San Francisco. In exchange for San Francisco being 37.9% higher than the national average in terms of its cost of living, you have the year-round mild Bay weather to enjoy. Then, if you factor in the closing costs, you will have a head start when it comes to affording to live there.
