Thoughts from Byron Wyndham
This information was provided by Byron Wyndham, owner of Wyndham and Associates. Please visit his site for a more details about Real Estate Closing Services.
WHO PAYS THE CLOSING COSTS?
Who pays the closing costs is negotiable between the buyer and the seller. Your real estate agent will look at many factors and discuss these costs with you. Sometimes the seller will be motivated to make a contribution on costs to help the purchaser buy the house. If there are many offers or if the seller is at his “rock bottom price”, a seller will not offer to pay any costs. You should get a Good Faith Estimate of the loan’s closing costs from your loan professional.
WHAT OTHER COSTS DO I HAVE?
Prepaid Items
Home Insurance, Mortgage insurance and interim interest are called “pre-paid items”. You must pay these "up-front" at the closing and, depending on your type of loan, the costs can be significant. Your real estate agent and your mortgage professional will help anticipate these costs in advance.
Escrow Items
Most lenders require that you have an escrow account. These are funds set aside in advance to pay for your taxes and insurance. The "up-front" amounts will vary depending upon when you close. Escrows are calculated based on costs of the insurance and the taxes. The amounts collected in advance will depend on when the annual costs are due. If you request that escrows be waived, be prepared to be charged a “Waiver Fee” by the Lender.
Taxes related to the Closing
There are taxes which must be collected at the closing, the transfer tax and the intangible tax. The transfer tax is $1/$1000, so a sales price of $148,000 will have a $148 transfer tax. The intangible tax is a tax on the loan. It is $3/$1000 so a loan of $125,000 has an intangible tax of $375.00
Pro-rated Taxes
Taxes are prorated between the parties at the closing. The purchaser is required to place funds in escrow to pay the taxes when they are due. The buyer will be reimbursed by the seller if the taxes have not been paid for the current year. The buyer will have to reimburse the seller if the seller has paid the taxes for the current year. The credit or debit appears on the front page of the closing statement.
Miscellaneous costs
Every sale has some miscellaneous fees, depending on the property. You may have to prorate the propane in the tank or the home owners association dues that have been paid. Water, which is often obtained from a well, may also have fees that will have to be prorated.
Things you need to know about buying Property in the Mountains
- Rules, Regulations, Laws and Taxes differ
- Georgia is NOT a Community Property state
Trusts cannot own property in Georgia - Georgia requires closing with an Attorney
Title Companies only issue policies
They do not conduct closings - Some counties have NO zoning
It is essential to have Subdivision Covenants and Well/Water Agreements - Many roads are private, not maintained by the County
Road Maintenance Agreements are a necessity - Having a Real Estate agent is essential due to scattered and hard-to-find locations
- Property with a view, on water, both or neither will decide cost
