You Can Save Money by Understanding the Fees and Costs When Buying and Selling Real Estate
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You Can Save Money by Understanding the Fees and Costs When Buying and Selling Real Estate

Pay attention to closing costs, junk fees, and other charges so you keep more cash at closing

July 31, 2025

Between showings, inspections and paperwork, it’s easy to lose sight of what you’re paying when buying or selling a home. Most expenses are bundled into “closing costs,” the fees due at the final signing. By understanding and negotiating these charges, you can save thousands.

What Are Closing Costs?

“Closing costs” encompass dozens of possible fees related to your transaction. They fall into two categories:

Recurring Costs

These cover ongoing expenses you’ll pay monthly or annually, often prepaid into escrow at closing:

  • Property taxes
  • Homeowners insurance
  • Private mortgage insurance (PMI)
  • Prepaid interest (depending on your closing date)

Nonrecurring Costs

One-time fees paid at closing include:

  • Loan application and origination fees (1–1.5% of loan amount)
  • Points to lower your interest rate (0–3% of loan)
  • Appraisal ($300–$700) and required inspections ($150–$350)
  • Credit report fee ($30–$50 per applicant)
  • Title search, insurance and attorney or settlement agent fees
  • Recording and transfer taxes (varies by county)
  • Survey ($150–$400) and flood-zone determination ($15–$50)
  • HOA or condo association transfer fees, if applicable

How Much Will Closing Costs Be?

Expect total closing costs of roughly 3–5% of your home’s purchase price. Exact amounts depend on your lender, county rates and loan program:

  • Application fee: $75–$300
  • Origination fee: 1–1.5% of loan
  • Points: 0–3% of loan
  • Appraisal: $300–$700
  • Prepaid interest: Varies; often $300–$750
  • Title insurance: $500–$1,500
  • Recording fees: $50–$200

Beware of “Junk Fees”

“Processing,” underwriting and rate-lock fees can be padded. You can often negotiate or shop elsewhere for better terms. Key fees to question include:

  • Application and underwriting
  • Rate-lock extension
  • Loan processing and document preparation
  • Broker or service fees

All-In-One Pricing

Some lenders offer a flat “all-in-one” closing fee to simplify. Confirm it covers only standard closing costs and not extras like bank account fees or future services you don’t need.

Asking the Seller to Contribute

In a buyer’s market, you can request the seller pay part or all of your closing costs. If they decline, consider asking for a seller credit toward specific fees, every dollar helps.

Comparison Shop to Save Thousands

Obtain Good Faith Estimates from multiple lenders (at least three) and compare side-by-side. Ask your preferred lender to match the best offer; they often will to win your business.

North Carolina-Specific Resources

  • NC Housing Finance Agency: Down payment and closing cost assistance for first-time buyers at nchfa.gov
  • NC Attorney General’s Office: Help with real estate disputes at ncdoj.gov/complaints or 1-877-566-7226
  • NC Department of Revenue: Property tax information at ncdor.gov

Minimizing Anxiety and Expense

You’ll receive a HUD-1 or Closing Disclosure at least 24 hours before signing. Compare it to your Good Faith Estimate, and question any discrepancies. Don’t hesitate to delay closing if figures don’t match what you agreed to.

By knowing what fees to expect, negotiating aggressively and using North Carolina assistance programs, you’ll keep more money in your pocket when buying or selling a home.