How Much Are Closing Costs in Georgia?
Closing costs in Georgia are typically around 2-5% of the home’s sale price for the buyer and 5-9% for the seller. In Georgia, closing costs are typically higher for sellers as they pay the real estate commission. However, many factors impact the fees required at closing and what they will cost, including the home’s final price, whether the seller worked with a realtor, the policies of the lender, and what the buyer and seller negotiate.
Georgia Seller Closing Costs
- Realtor Commission
- Title Service
- Owners Title Insurance
- Property Taxes
- Transfer Tax
- Recording Fees
- Attorney Fees
- Miscellaneous Fees
In Georgia, like many other states, the seller is typically on the hook to pay the commission of their representation and the buyers, which is usually 6% of the sales price (or 3% each). But, the seller doesn’t pay out of pocket for this expense but will instead have the cost deducted from their profits.
Title service refers to the costs of conducting a title search and transferring ownership to a new buyer. The buyer and the seller will typically pay their own title company to verify the ownership and transfer, which usually costs around 0.3% of the sale price.
Owners Title Insurance
Title insurance protects the owner if there is an issue with the title, which can get expensive to sort out in court. A typical title insurance policy costs about 0.5% to 1% of the home’s sale price.
Unless you close on the home on January 1st on the dot, you will still be on the hook to pay any outstanding property taxes you have yet to pay. The cost of those property taxes will vary greatly depending on when you close, where you are located, and the value of the home.
The state of Georgia charges a tax to transfer property to another person, which the seller pays. The current transfer tax equals $1 per $1,000 in assessed value, so if the property is $200,000, the tax would be $200.
You must pay a small fee to the city or county to record the deed and mortgage of your property in public records. The exact fee varies depending on the location, but it’s typically no more than $50.
Georgia is an attorney close state, which means a lawyer is required to finalize the transaction. So, you will be on the hook to pay legal fees, which will vary depending on what you negotiate with your representation.
Miscellaneous fees always come up, which may or may not be required in every transaction. This includes an HOA clearance letter, buyer incentives, or mortgage prepayment penalties.
Georgia Buyer Closing Costs
- Appraisal Fee
- Home Inspection Fee
- Mortgage Application Fee
- Origination Fees
- Title Fees
- Other Buyer Closing Costs
Before you close on the property, you’ll want to know how much it’s worth, and an appraisal will be required if you’re financing the purchase. Buyers are on the hook to pay appraisal fees, which are usually around $300 to $400.
Home Inspection Fee
You’ll also want to conduct a home inspection to verify the property’s condition before you buy. Home inspections typically run from about $350 to $500 in Georgia.
When you apply for a mortgage, the lender may charge you an application fee just to process the paperwork. It’s typically a flat rate fee that will range from $50 to $500, depending on the provider.
Origination fees are a separate charge required by certain lenders once you move forward with the loan and create a new account with the bank. They pay for the costs of underwriting and servicing the loan, and usually range from about 0.5% to 1% of the loan amount.
The buyer will also typically need a title company to do a search and will often be required to pay the lender’s title insurance policy, which will also be about 0.5% to 1% of the sale price.
Other Buyer Closing Costs
Buyers will also be required to bring the remainder of their down payment to the closing table and may also need to pay private mortgage insurance if they cannot afford the full 20%. They must also pay attorney fees if they need representation and provide proof of a homeowner’s insurance policy.
How to Reduce Georgia Closing Costs
Closing costs can be a significant financial burden to homeowners who likely just made one of the largest purchases in their lives when making a down payment. So, it’s natural to want to find ways to reduce this additional expense. Here are a few tips for reducing Georgia closing costs.
1. Consider For Sale By Owner
Sellers looking to significantly reduce their closing costs can always opt out of hiring a real estate agent and list their home as for sale by owner. While it may take longer to sell, the cost savings may be worth it.
2. Negotiate with the Other Party
It’s common for buyers and sellers to negotiate who pays the closing costs as a bargaining tool. So, if you know you have an advantage in the market, you can request the other party pay some or all of the closing costs. For instance, if it’s a strong seller’s market, you could suggest the buyer pay some of the closing costs to beat the competition or vice versa if you’re a buyer and know the home has gotten few offers.
3. Negotiate with Your Lender
Everything is negotiable, and you can always try to haggle with your lender to reduce some of the fees related to the loan. Some lenders will even waive specific fees if you are a long-time client or first-time homeowner. So don’t be afraid to ask and see what they offer and make sure to shop around for the best deals.
Georgia Closing Costs Bottom Line
No one likes paying additional fees after already handing over a massive down payment. But closing costs are necessary to ensure everything checks out and the transfer of the property is legitimate. So, make sure to save accordingly if you plan on buying a home in Georgia.