High closing costs?
I often write about questions my relocating buyers ask me. In this case, my topic is about a question that they often don’t ask me but should: “What will my closing costs be?” I usually mention Pennsylvania’s high settlement fees during my initial conversation with clients, exactly because they do, so often, come as an unwelcome surprise. If you are looking at a home purchase on Philadelphia’s Main Line or surrounding areas, be prepared.
What fees make up closing costs?
If you want the broken down, line-by-line explanation, please watch my video. If you just want a ballpark, without all the gory details, assume that closing costs will probably be around 4.5% of the purchase price. Factors which contribute significantly to variations on that estimate include the property tax amount, whether there are any capital contribution fees in the case of a condo or HOA. Your closing costs will be less if you do not escrow money with your lender for your home owner’s insurance and property taxes. (Most people do roll those expenses in so they are paid out of the monthly payment as opposed to being walloped with a large bill due in one lump sum). While it seems that in many areas, sellers pay all of the transfer tax, in Pennsylvania, it is split evenly between buyer and seller (1% of purchase price for buyer and for seller, in most townships, though 2% in the city of Philadelphia). Title insurance, another buyer settlement fee, is set by the state and is non-negotiable. Remember that you cannot roll these fees into your mortgage as they are due to the title company in cash (well, really a bank check or wire) at the time of settlement. So be sure to budget for not only your down payment, but your closing costs when considering the cost of a home purchase.
Again, if you want to see details, please watch my video.
If you are relocating to the Philadelphia/Main Line area, please go to my blog page and search for posts using the relocation tag. Contact me to discuss your Philadelphia area relocation! jen@jenniferlebow.com/610 308-5973
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