Are you a first-time homebuyer? If so, then you are probably reasonably excited about choosing your new home and making plans for your decor. However, you may also be feeling a little overwhelmed by the process of buying your home. That's why you will need the support of a local real estate agent in Knoxville to guide you through some of the trickier steps toward home ownership. One such area that seems to cause a fair amount of confusion among first-time buyers is the additional costs that need to be paid as part of your closing costs. Let's take a look at what closing costs are and how much you might expect to pay.
What Are Closing Costs?
Closing Costs are the additional expenses paid to your lender and other parties for loan-related services. They can be considered processing fees and cover things like getting the home appraised and searching for the property's title. The fees you will be expected to pay can vary depending on the loan you are taking out and even where you live. If you are working with a local real estate agent in Knoxville, they should be able to give you some idea about the closing costs you can expect to pay. However, as a general rule, you should be prepared to pay between 3% and 6% of the loan amount in closing costs. In Tennessee, the average closing cost, including taxes, is around $3790. It is important to note that your down payment is not included in your closing costs and will be paid in addition to these fees. There may be room for you to negotiate depending on the market, and you may be able to have the seller pay all or part of your closing costs to facilitate a faster sale.
What Is Included in a Closing Disclosure?
A few days before you finalize the purchase of your home, you should be issued with a closing disclosure. This is a document that will break down the purchase price of your new home and itemize each individual fee. It should also set out the terms of your loan, including the interest rate and payment amounts you will need to make each month. Your local real estate agent in Knoxville can talk you through this document and help you to understand the different fees and why they are necessary. Some of the typical fees that will be included in closing costs include:
- Lender Origination Fee
- Any Relevant Buy-down Points that Lower The Interest Rates
- Appraisal Costs
- Title Searches
- Property Taxes
- Credit Report Fees
- Third-Party Fees, Such as HOA fees
- Property Insurance
- Escrow Amounts
- Property Taxes Owed to the City or County
- Attorney Fees
- Courier Fees to Deliver Documents
If you are preparing to buy a property, many experts suggest that you should budget for around 5% of the purchase price to cover closing costs. This is likely a conservative estimate, but it gives you some breathing room to avoid any unexpected surprises! The final cost will depend on a number of factors, including the property's purchase price, your down payment, the type of loan you are using, and adjustments negotiated with the seller. Your local real estate agent in Knoxville can help you work through your closing disclosure document and ensure you fully understand all of the charges.
How Wright Realty Can Help
As part of Wright Realty's commitment to wholistic real estate services, we can help you connect with trusted experts we work closely with regularly. This includes title services and closing. Having the right representation means that you have someone on your side to advocate for you and make sure that you remain protected from previous owners when you purchase your home. If you need assistance with closing costs, we can recommend trusted service providers as part of our service as your local real estate agent in Knoxville. We want our customers to have peace of mind when buying or selling a property, and much of that comes with having a team you can trust. We can be your single source of communication and responsibility, keeping all the different moving parts in place and helping the process run as smoothly as possible. This is real estate done the Wright way!
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Wright Realty is a full-service real estate concierge with a wholistic approach to buying and selling property in East Tennessee. We are your trusted advisor and keep open communication throughout your entire buying/selling process. Real Estate done "Wright" means more than just a 'transaction'.
Finding Your Property the "Wright" Way!
Visit www.realtydonewright.com or call 865-556-8599
