Here’s a question for homebuyers: can you shop for the lowest closing costs on the market?

One consumer advocate certainly thinks so. His name is Timothy Dwyer and he’s on a mission to convince new homebuyers that you don’t have to be a prisoner of high closing costs.

Dwyer, president & CEO of Entitle Direct Group, Inc., firmly believes that homeowners can slash new home closing costs by learning how to shop for the best deal.

Certainly, closing costs are a pain in the neck for homebuyers. On average, they can run up to 5% of the total purchase price of a new home. In hard numbers, that’s a big hit to the old pocketbook. For a $300,000 home, the closing costs would be in the $12,000 range.

Closing costs do cover a lot of ground when buying a new home. According to, the average costs cover:

  • Lender fees (origination fee, application fee, document preparation fee, etc.)
  • Government fees (recording fees, mortgage and transfer taxes)
  • Prepaid fees (real estate taxes, condo fees and homeowner’s insurance)
  • Third-party fees (appraisal, credit report, flood certification/insurance and title insurance — often the largest single closing expense).

To streamline the closing cost process, the federal government has ordered a makeover for the Good Faith Estimate, which lists all the fees linked to buying a new home. But Dwyer doesn’t think that change goes far enough. He says it’s up to consumers to find their way out of the dark and start cutting their home purchase costs. “The traditional home-buying process often keeps home buyers and sellers in the dark about their real estate closing,” says Dwyer.

One relatively easy area to cap costs is with title insurance. According to Dwyer, title insurance is fertile ground for third-party fees to really add up. Such fees include title fees and title insurance — two of the chief culprits for higher closing costs. In a word, title insurance protects you and your lender from any errors or additional claims on your new home’s title. By shopping around, you can save up to 35% off of the cost of title insurance.

"Many consumers are unaware that they have the right to shop around for a lower insurance premium rate and choose their title insurance company," he explains. "The Internet provides a good starting point for shopping. Search for title insurance or go to one of the sites designed to help with the process including (but make sure you sort by price) or"

When shopping for title insurance, don’t be reluctant to ask questions. Consumers should focus on the title company’s service, areas of coverage and experience. Dwyer specifically advises consumers to ask title companies about other fees tied to title insurance, including the settlement/escrow/closing fee.

Negotiation is an underused tactic that the average homebuyer misses out on, Dwyer adds. Not haggling over fees and prices is a big mistake. Costs for application fees, processing fees, origination fees and underwriting fees should all be negotiated with your lender, which collects such fees.

By getting more aggressive about questioning lenders on high home purchase fees, consumers can really cut into high closing costs. The key is to ask questions and shop around — and keep looking until you get the best deal possible.

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