Posted by Devon on October 25, 2004 at 10:21:49:
Investment property closing costs are different than primary residence closing costs. Primary residence is usually between 2-3% of loan amount. Investment properties usually range from 3-6% depending on loan amount, time of month of closing, etc.
Closing costs? - Posted by Charley M
Posted by Charley M on October 24, 2004 at 08:41:35:
I have purchased my first investment property, and I am scheduled to close next week 10/29/04. I have a question concerning closing costs. What is the norm on how much the buyer is expected to pay? I would appreciate any input. It would be helpful to know if there are any unecessary fees at the time of closing. I am a newbie investor and would like to gain some knowledge as to what is to be expected. I live in Florida, so anyone that has any knowledge of standard closing costs here would be greatly appreciated.
Thanks in advance,
Charley M
Re: Closing costs? - Posted by Natalie Smith
Posted by Natalie Smith on October 26, 2004 at 19:40:05:
Are you getting a loan on the property?
If so, the loan broker or lender should have provided you with a Good Faith Estimate. This should tell you how many points you are paying for the loan along with other miscellaneous fees (credit report, appraisal, flood certification, processing fees, underwriting fees, etc).
In addition to the fees associated with the loan, real estate taxes will probably be prorated to the date of sale.
Your lender may require you to pay one year’s premium on hazard insurance. Your lender may also want to collect two more months worth of insurance and two months worth of taxes for your escrow account.
Then, the settlement agent or attorney conducting the closing will also have fees for the title search and title insurance.
Also, there will be recording fees at the local and state level. This is for recording the deed and the mortgage (if any).
If you ordered a survey or a pest inspection, there will be fees for those.
Hopefully this gives you some info to crunch numbers on. Question everything on the settlement statement. They should take the time to answer your questions in the hopes of getting more business from you in the future.
Good luck!
Re: Closing costs? - Posted by jasonrei
Posted by jasonrei on October 25, 2004 at 18:51:56:
There’s an add-on called Boundary Deletion that you may not want. Might ask for a reduction in messenger fees if they seem out of line. Escrow fees aren’t written in stone. I pay $135-150 for my half. Some places charge more, some less. On some of my sales I prep my own deed, that saves me some money.
Definitely ask for a prelim HUD, and see if you can get it 2 or 3 days before closing so you can review it.
Re: Closing costs? - Posted by Randy (SD)
Posted by Randy (SD) on October 25, 2004 at 11:17:07:
Ask your closing attorney or escrow company for an estimated HUD-1. The numbers may be slightly different at closing, but they will generally estimate some expenses like property insurance or prorated taxes slightly higher so there is no surprise at closing.