Chic vs. Geek: The Real Cost of Closing

What do buyers need to know about closing costs?

CHIC (PEARL)

Did you know Federal law requires that clients receive a HUD-1 or settlement statement outlining all charges in a real estate transaction? This is how a buyer can learn the closing cost — or the amount they will owe in order to close escrow on their new home. The closing cost can consist of the title and escrow fee, lender’s fee, homeowners insurance, home warranty (optional), and escrow administration fee There's a lot that can happen during escrow. A good real estate agent will help you avoid surprises that slow things down.

GEEK (KEVIN)

Let me tell you a story about what a bad real estate agent does. After I bought my first home in the Bay Area, I didn't drive my car for six months because I couldn’t afford to pay for gas. Why couldn’t I afford to pay for gas? Well, my real estate agent didn’t tell me I’d have to pay closing costs in addition to the down payment. Needless to say I was eating microwave noodles for a few months. Closing costs can vary between states, countries, even cities. For example, in Mountain View, If you buy a house for $1M, your closing costs could be as high as 1% of the sale price. It’s always important to check for any changes in the law or the lender’s guidelines.