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 EntitleDirect.com, 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.