Georgia closing costs can add on several thousands of dollars to a real estate contract at closing. It is better to ask questions and know ahead of time just what you will need to pay for at a real estate closing, than to be surprised and not have the available funds to complete the contractual sale on time. Georgia closing costs do vary from one lender to another as well as from one loan program to another. In Georgia it is a state requirement to have an attorney present at real estate closings, and it is always a prudent decision to have legal representation throughout the negotiations and settlement of your real estate contract.
Georgia Closing Costs
According to the Georgia Real Estate Commission, Georgia closing costs that the seller typically pays for the:
- Transfer tax on the deed; The current rate may change and is a % of the selling price of the property
- The Real Estate Commission to the Listing Broker, which may be split with the selling broker if more than one broker was involved in the sale of the property
- Any liens, overdue fees, any back property tax, and any costs needed to correct any issues with obtaining a free and clear title
- While the seller is no longer required to pay for a termite letter, this may have been addressed in the real estate contract and should address who is to pay for a termite inspection, and who will pay to treat or repair any problems.
In Georgia, real estate closing costs may be paid by either the seller or the buyer. For loans less than 90% Loan to Value, the lender used may only allow the seller to pay up to 3% in the total closing costs of the property. With other types of loans a seller may be able to pay up to 6% of the closing costs. Having a real estate lawyer on your side will ensure that the details of the closing costs will all be disclosed at the time the contract to buy/sell the property was made.
Specific Items of Georgia Closing Costs
There are numerous items that you will find that require payment during your real estate closing. The following list describes the most common items that need to be paid at closing. They may be additional items that vary with the lender used, with the mortgage broker used, underwriting fees, and other incidental fees that can add on to the total Georgia closing costs at closing. It is important to know and understand all costs before the closing date in the event changes need to be made or accommodated for.
- Loan Origination Fee: This is usually the fee that is charged by your mortgage company or bank. The average cost is 1% of the loan amount but can be higher or lower.
- Title Search: This is extremely important in protecting the buyer from ownership of property that may still have legal claims on it. A title search fee may vary depending on the type of property, number of previous owners, property tax status, etc. Georgia closing costs may be around $150 or more.
- Lender’s Title Insurance: This is a mandatory fee that will protect the lender’s interest in the property against any future claims against the title. The fee for this Georgia closing cost is $200 and up.
- Appraisal: This is required to determine that the value of the property is worth the amount of the mortgage or loan compared to similar properties in the area. The fee for an official appraisal can be from around $350 and up.
- Flood Certification: This certification is required by all title companies and does not indicate that you are in a flood zone. Georgia closing cost is around $90.
- Transfer Tax on the Mortgage: This tax will vary dependent on the mortgage, the lender used and the amount of the loan.
- Attorney Fee: Your fee to the Georgia Closing Attorney who is the lender’s representation in the closing. Georgia closing cost in the Atlanta area varies from $400-$500 and up.
- OPTIONAL – Owner’s Title Insurance: This insurance protects the buyer/owner against any future claims against the title of the property. Typically the cost is the purchase price of the property multiplied by .002
- OPTIONAL – Final Property Survey: While this is not always required, it does depend on the lender; the buyer may request this as well. The fee for this is around $300 and may be requested by the Georgia closing attorney or the buyer.
- OPTIONAL – Georgia Wood Infestation Report: Since 2007 the Georgia Association of Realtors does not require the seller to provide a clear termite letter. The buyer would need to order the inspection within specific deadlines and then work with the attorney and seller if treatment or repairs are required. As noted above, this can be written into the contract before all parties sign to proceed with the transaction.
In addition to closing costs there are also pre-paid items which include pro-rated property taxes and homeowner and hazard insurance. Any association fees will also need to be paid if your property belongs to a homeowners association. Private mortgage insurance may be required if your loan is less than 80% loan to value. There are also other recommended optional fees such as a home warranty or a radon inspection. It is critical to have a knowledgeable Georgia closing cost attorney through the complex legal process of contracting for and buying a piece of Georgia real estate. Your North Metro Atlanta closing cost attorneys of Almand & Cohen will guide you through every step of the process. There will be no surprises with Almand & Cohen, your Atlanta and Marietta real estate lawyers.