Ask Your Realtor About Closing Costs
Approximately two-thirds of adults ages 18-34 who plan to buy a home are unaware of closing costs, and most find out about these costs from their REALTOR®reg;, according to a recent survey by ClosingCorp, a residential Real Estate closing cost data and technology company.
Closing costs are paid when a Real Estate transaction closes and the title to the property is transferred to the buyer. They typically equal 2 to 5 percent of the total purchase price of a home. The fees are incurred by either the buyer or the seller, and typically cover everything from appraisal, inspection and attorney’s fees to home warranties.
The “ClosingCorp National Closing Costs Survey” of more than 1,000 adults showed that more than half of people report that they learned about closing costs from REALTORS®reg; or by doing their own research. Millennial homeowners are more likely to learn about closing costs from a REALTOR® as opposed to a lender by a ratio of nearly two-to-one, according to the study.
The study emphasizes the need to better educate all consumers on the Real Estate closing process, said Closing Corp CEO Brian Benson.
“While interest rates are often the driving force in initiating a Real Estate transaction, the REALTOR®, lender, title, and other settlement fees also have a significant impact on the down payment and cash outflow from the borrower perspective. Not understanding how everything is related can be a real impediment for first-time home buyers who want to get into the market,” Benson said.
The study also highlights how beneficial a good REALTOR® can be, especially to younger first-time home buyers, who are often more tech-savvy than older buyers.
“We believe this (study) really highlights the complexity of a residential Real Estate transaction,” Benson said. “Whether they are researching a home on their own or getting help from an interested third party, the bottom line is that people need access to the correct information, and it needs to be simple for them to understand.”