Real Estate Closing Costs - Who Pays What On Real Estate Closings in Anchorage Alaska?
by Dan Wolf
on Friday, May 18th, 2012 at 10:43am.
The average "guy on the street" doesn't understand closing costs I'm understanding. I say that because I ran into a situation a few days ago with a FSBO, a For Sale By Owner, person who had just bought a house directly from the seller without a real estate agent representing them. They were telling me how they saw an ad in the newspaper and a scheduled open house so they went, looked and made an offer on the property. I asked a few questions about the agreement such as "When are you closing?", "Are you doing a home inspection?" and "Have you ordered the appraisal yet?
When answers to the question sounded a little vague; I asked the buyer how they split the closing costs? The buyer said they agreed to split the closing costs between the buyer and seller 50/50.
Here's the deal on closing costs; there is a "standard" and normal division of closing costs. Basically the seller pays for title insurance warranting the title, in Alaska the seller generally pays for the appraisal, several things are customarily split such as document preperation charges, document recording and the title company closing fee.
Buyers generally pay lender fees to get a loan such as bank fees, commitment fees, possibly VA funding fees and the type of title insurance that covers the lender against flaws in the property title called ALTA title.
It is far too simplistic to split these 50/50. It depends on the type of finanicing and other details of the transactions to be able to say exactly. FHA and VA, for instance require the seller to pay some items that conventional financing doesn't really care about.
One of the ways your real estate agent, hopefully that's me, can help you is to tell you what is normal in a transaction. If buyer needs assistance from the seller with his closing costs, the lender will have rules dictating how much the seller is allowed to pay. That is because the lender wants a minimum commitment in the form of money from the buyer.