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Home Inspection Blog Posts & Tips

What Are Closing Costs & How To Reduce Them?



While the world continues to evolve in response to the COVID-19 this leaves most of us to navigate the challenges of the home buying and selling process in the Columbia, Greater Columbia, Lexington, Irmo and surrounding areas of South Carolina.  


One of the most commonly asked questions from first-time home buyers are “What are closing costs and how to reduce them.” Based on the perspective and insight from mortgage industry experts and real estate professionals. We’re going to explore a few points to help you better understand what closing costs are and how to vastly reduce them. What exactly Are Closing Costs and Who pays for them?


First let’s take a look at typical closing costs. Sorry to disappoint you but there are no typical closing costs. The reason being is that the closing costs boils down to the fact that different states and municipalities have different legal requirements and fees for the sale of the home.


However, in this short article we are going to discuss common closing costs for buyers and sellers of the real estate transaction. Many costs associated with closing cost have to do with financing or other costs independent of the mortgage loan. Normally charges are delegated to the buyer and the  seller, but anything is negotiable


Especially during a buyer’s or seller’s market. A buyer’s market  is when properties are slow to sell, and in some cases sellers may agree to pay part of the buyer closing costs.

However this is less likely to happen in a seller’s market when the demand exceeds the supply. In other words, there are many interested buyers, but there is a low real estate inventory. In a seller’s market, homes sell faster, and buyers have to compete with each other in order to score the purchase of their dream home.


What Are Some Closing Costs Buyers and Sellers
Should I Expect To See?


Here’s a look at common closing costs that are associated with the buyers share of the closing costs:

  • Loan origination fee
  • Loan discount fee
  • Loan application
  • Points ( to “buy down” the interest rate)
  • Lender’s attorney fees
  • Buyer’s attorney fees
  • Appraisal fee
  • Credit report fee
  • Lender’s inspection fee
  • Mortgage broker commission or fee
  • Tax service fee
  • Processing fee
  • Underwriting fee
  • Wire transfer fee
  • Hazard insurance premiums


How To Reduce Closing Costs?

Unfortunately there is no way for you to outright dodge closing fees, however there are a few ways that homeowners can pay less. Keep in mind that  some closing costs are negotiable such as attorney fees, commision rates, recording costs, and messenger fees.


  • Close at the end of the month. One simple way for you to reduce your closing cost is to schedule your closing at the end of the month. For example: If you close on the 29th you pay only one day of interest in comparison to the beginning of the month 5th to 30th.
  • Share expenses with the seller. Some loans  allow sellers to contribute up to 6% of the sale price to the buyer as a closing-cost credit. This is less likely to happen in hot markets where inventory is scarce.
  • Military Benefits:   Military members have closing-costs benefits that are overlooked. If you are a service member or veteran you may qualify for funds to help you purchase a home. These benefits are not limited to the VA loan. Do your research to make sure that you are getting all the benefits that you are entitled to.
  • Apply for an FHA loan. Individuals with lower incomes can apply for an FHA ( Federal Housing Administration) loan  which is a government-backed mortgage. 


How Can  S&J Home Inspection Help Buyer & Sellers Save Time & Money?

Now that we have covered what closing costs are and a few ways to reduce your closing costs.

Although you can’t outright dodge all of your closing fees, what you can do is to hire the right home inspector if you’re in the Columbia, SC and surrounding areas and save time and money with a same day home inspection and pest inspection. We strive to alleviate some of the stress associated with the home buying and selling process, by simplifying your home and pest inspection to save you money and time by getting your CL-100 letter the same day as your home inspection. Request A Home Inspection!


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