Here's a comprehensive breakdown of typical closing costs in Massachusetts, highlighting who is generally responsible for each expense. Please note that specific costs can vary based on individual transactions, and some items may be negotiable between the buyer and seller. It's advisable to consult with a real estate professional or attorney for guidance tailored to your situation.
Seller's Responsibilities:
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Real Estate Agent Commissions:
- Description: Fees paid to the listing and buyer's agents for their services.
- Typical Cost: Approximately 4% to 6% of the sale price.
- Responsibility: Negotiable.
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Massachusetts Transfer Tax (Excise Tax):
- Description: Tax imposed by the state on the transfer of property.
- Typical Cost: $4.56 per $1,000 of the sale price.
- Responsibility: Seller.
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Attorney Fees:
- Description: Legal services for preparing and reviewing closing documents.
- Typical Cost: Between $1,200 and $1,800.
- Responsibility: Seller.
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Outstanding Liens or Mortgages:
- Description: Any existing debts or liens on the property that must be cleared before transfer.
- Typical Cost: Varies based on the amount owed.
- Responsibility: Seller.
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Smoke and Carbon Monoxide Detector Certificate:
- Description: Certification from the local fire department confirming compliance with safety regulations.
- Typical Cost: Typically between $50 and $100.
- Responsibility: Seller.
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Septic System Inspection (Title V), if applicable:
- Description: Inspection to ensure the septic system meets state standards.
- Typical Cost: Approximately $800.
- Responsibility: Seller.
Buyer's Responsibilities:
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Loan Origination Fees:
- Description: Charges by the lender for processing the loan application.
- Typical Cost: Varies; often around 0.5% to 1% of the loan amount.
- Responsibility: Buyer.
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Appraisal Fee:
- Description: Assessment of the property's market value by a licensed appraiser.
- Typical Cost: Typically between $300 and $500.
- Responsibility: Buyer.
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Home Inspection Fee:
- Description: Evaluation of the property's condition by a professional inspector.
- Typical Cost: Usually ranges from $300 to $500.
- Responsibility: Buyer.
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Title Search and Title Insurance:
- Description: Ensures the property's title is clear of any liens or encumbrances; insurance protects against future claims.
- Typical Cost: Title search: $150 to $500; Owner's title insurance: approximately $1,322.
- Responsibility: Buyer.
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Recording Fees:
- Description: Charges for recording the deed and mortgage with the county.
- Typical Cost: Approximately $48.
- Responsibility: Buyer.
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Prepaid Expenses:
- Description: Advance payments for property taxes, homeowner's insurance, and interest.
- Typical Cost: Varies based on timing and lender requirements.
- Responsibility: Buyer.
Shared or Negotiable Costs:
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Home Warranty:
- Description: Optional coverage for repair or replacement of home systems and appliances.
- Typical Cost: Ranges from $300 to $600.
- Responsibility: Negotiable; either party may pay.
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Property Taxes:
- Description: Prorated property taxes based on the closing date.
- Typical Cost: Varies depending on the property's assessed value and the time of year.
- Responsibility: Both parties; prorated based on ownership period.
- Property tax rates can vary by municipality. It's essential to verify the current rate for the specific property location to provide an accurate estimate.
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Homeowner Association (HOA) Fees:
- Description: Dues required by the HOA, including any transfer fees.
- Typical Cost: Varies; transfer fees can range from $200 to $500.
- Responsibility: Negotiable; often the buyer pays ongoing dues, and the seller pays transfer fees.
This overview provides a general understanding of who typically pays for various closing costs in Massachusetts. However, specific responsibilities can vary, and it's essential to review your purchase and sale agreement carefully. Consulting with a qualified real estate professional or attorney can provide clarity tailored to your transaction.
Estimated Total Closing Costs:
Low Estimate: Approximately 6.25% of the sale price.
High Estimate: Approximately 9% of the sale price.
Example for a $500,000 Property:
Low Estimate: $31,250
High Estimate: $45,000
Note: These estimates are approximate and can vary based on specific transaction details. It's advisable to consult with a real estate professional or attorney for a more precise estimate tailored to your situation.