Buyer Closing Costs

You are ready. You’ve been browsing refrigerators. You’ve been looking at dining room sets. You even have a new espresso machine picked out that would go perfectly in the corner of your new-to-be kitchen. What you haven’t done is actually buy the house yet. Small detail, I know.

Purchasing a home is a huge investment and many people save for a down payment, but forget about closing costs. While it is very common for closing costs to be negotiated in a transaction, there is no guarantee that a seller will agree to pay your costs for you, so it is best to have a plan.

Buyers of a home in the Salem Oregon area typically pay for the following lender closing costs at close of escrow:

  • Appraisal
  • Loan origination fees (1-1.5% of the purchase price is common)
  • Credit report fees
  • Flood Determination Fees
  • Tax Service Fees
  • Administration Fees
  • Lender’s Title Insurance Policy

And prepaids such as

  • Prepaid insurance and prepaid taxes for your escrow account with your lender.
  • Prepaid interest on the home loan

In Oregon our contracts call for a 50/50 split between buyers and sellers for escrow fees. The escrow fees a buyer typically pays here are:

  • Lender’s Title Insurance
  • Mailing Services
  • Closing fees
  • Document Service Fees
  • Wire Transfer Fees (if used)
  • Recording Services

Oregon does not have real estate transfer taxes like many other states have so buyers and sellers don’t have to add that aspect into the negotiation of a home sale. So as you start saving for your downpayment, remember you’ll need an additional 3-4% of your expected purchase price to be set aside for fees. You might have to scale down that espresso machine for a Mr. Coffee coffee maker for the time being.