Closing Costs When Selling or Buying Crested Butte Home
Closing costs are the costs due at the “close” of the deal and are included on your Settlement Statement. Some of these fees go to the lender and some to third-party participants. They include all the fees and costs associated with completing the sale or purchase of a home, and are in addition to the actual cost of the property itself. It’s important to note that these costs apply to both the Buyer and the Seller. Therefore, it is good to familiarize yourself with the closing costs when selling or buying Crested Butte home.
What costs are included at closing?
Although costs can vary by state or locality, in general they can include:
- Brokerage Commissions – These commissions are paid by the Seller – and the commission rate is split between the brokerage who Listed the Home and the brokerage who brought the buyer. The Brokerage gets paid – then the Listing or Buying Agent receives a split (then Uncle Sam gets his third…).
- Title search and title insurance fees: The fees the title company charges for the owner’s title policy and the lender’s title policy.
- Mail-out fees: The title company will include a fee for overnighting documents back and forth to buyer/seller if they will not be in town for closing.
- Recording fee: The cost to record the transfer of ownership into the county record.
- Documentation fees: The title company may charge fees for preparing documents for both the buyer and the seller.
- Attorney Fees: These are any fees you are charged by an attorney to be paid at closing. This usually includes the fees for an attorney to prepare the deed. Additionally, these fees may also be for an attorney working for the title company to prepare or review the closing documents required to complete the real estate transaction. These fees may also be listed as “title company closing fees.”
Fees Related to Home
- Survey fees: The cost of the survey or ILC (Improvement Location Certificate)
- Appraisal fee: The fee charged by the appraiser for completing the appraisal report (estimating the market value).
- Inspection fees: The cost of the inspection, to be paid at closing unless the buyer paid the inspector separately
- Pest infection control fees: The cost for a pest inspection or remediation to be paid at closing unless the buyer paid the inspector separately.
- Flood title certification fee: Homes located in flood zones require a flood insurance policy. If a title search specific to flood zones is required, there may be a separate fee.
- Utility fees: Prorated utilities. If a seller has pre-paid utilities for the month, the remainder of the month will be prorated and the buyer will see a debit, and the seller a credit for the remaining days of the month.
Fees Related to Loan
- Application fee: A fee charged by the lender to cover the cost to process loan information.
- Points: A “point” is one percent of the total amount of a mortgage loan. Typically, this will be origination points (fees as a percentage of the loan), or discount points (prepaid interest). Some lenders offer no-closing-cost loans. However, their fees and points may be bundled into higher interest rates or higher loan amounts. The activation fee is also included in this.
- Underwriting fees: The fee the lender charges for “underwriting” the loan on the home.
- Credit report fee: As part of the mortgage approval process, lenders may request a credit report.
An escrow is a separate account established to hold the monies associated with a real estate transaction prior to and after closing. These can include the earnest money, seller payments toward closing, prepaid private mortgage insurance and property taxes. Escrow fees are the fees for someone to set up and maintain escrow accounts and pay out the monies when required.
Fees Related to Tax and Insurance
- Taxes and insurance: Prorated property taxes and homeowners insurance fees.
- Transfer fee (tax): Some municipalities or developments may have a “transfer fee” (tax) of 1-3 percent of the purchase price of the property. Downtown Crested Butte has a 3% Transfer fee, Prospect has a 2% Transfer fee, the Mt. Crested Butte Base area condos have a 1% transfer fee. It is customary in the Crested Butte area for the buyer and seller to split this amount; this is negotiated in the contract.
- Withholding tax for nonresident sellers: Some states will tax nonresident sellers on the net proceeds of the sale of property. In Colorado this is a 2 percent tax for out of state real estate sellers. There are exceptions, and there is an affidavit form that can be submitted to prevent the withholding (in Colorado, it is form DR 1083). Consult your attorney or tax advisor.
Closing Costs When Selling or Buying Crested Butte Home Final Thoughts
If you would like a break down of more exact cost estimates contact me directly.
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Global Luxury Property Specialist
Coldwell Banker Bighorn Realty
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