Buying a new home is an exciting and big decision, whether it’s your first home or your third. But before you dive too deep into buying new furniture or appliances, be sure to budget for closing costs.
Closing costs are the fees and expenses associated with finalizing a real estate transaction and transferring ownership of a property from the seller to the buyer. If you’re feeling unprepared or overwhelmed, don’t worry. To help you budget for closing costs, this Redfin article will cover how much closing costs are in Connecticut, who pays for them, and which costs you can expect to pay as a buyer and as a seller.
How much are closing costs in Connecticut?
In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Closing costs in Connecticut are usually between 2%-5% of the home’s purchase price. But it’s important to remember that this is just a range and the total amount will depend on various factors, such as the purchase price of the home, the type of loan, and any adjustments negotiated with the seller.
Let’s say you’re buying a home in Greenwich, where the median home sale price is $2,195,000. Based on this, you could expect closing costs to be between $43,900 and $109,750 . Whereas if you’re buying a home in Stamford, which has a median sale price of $691,000, closing costs could range from $13,820 to $34,550 .
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Generally, both buyers and sellers can expect to pay closing costs in Connecticut. But, each party’s closing costs amount will vary depending on what they are required to pay. Another thing to keep in mind is that buyers typically pay for closing costs out of pocket, while the seller’s closing cost payments are often deducted from the home sale proceeds.
Buyer closing costs in Connecticut
Closing costs in Connecticut for homebuyers typically range between 2%-5%. If you paid earnest money, this amount will be subtracted from your closing costs, which will reduce the total amount you owe at closing. Earnest money is typically between 1%-3% of the home’s price. Let’s break down some of the common closing costs covered by the buyer:
Appraisal fee: Your mortgage lender will require a home appraisal to ensure the home value is equal to or more than the loan amount. Home appraisals typically cost between $300 and $500, depending on location. If you pay at the time of service, it will not be included in your closing costs.
Inspection fee: Although not required, a home inspection is highly recommended. Home inspections generally range from $300 to $500 in cost and are usually paid at the time of service. However, if not, it will need to be paid at closing.
Loan origination fee: Your lender may charge a fee for creating your loan. It’s important to inquire about what this cost covers and whether it’s negotiable to potentially avoid high costs.
Loan processing fee: Lenders may also charge a loan processing fee, covering underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible waivers.
Loan discount points: If you’ve purchased points to lower your interest rate, you’ll usually pay a one-time fee at closing. Each point can lower your rate by 0.25% to 0.5%. Consider your long-term plans, such as how long you plan to own the home or if you plan to re-finance, before purchasing points.
Private mortgage insurance (PMI): When your down payment is under 20%, you’re typically required to pay PMI. Some loans allow upfront PMI payment at closing, giving you the choice between higher upfront costs or increased monthly payments.
Title insurance:Title insurance is a one-time fee paid as part of closing costs. Buyers typically cover both lender and owner title insurance policies.
Homeowners insurance: Your annual homeowners insurance premium may be included in your closing costs in Connecticut.
Homeowners Association dues: For homes in HOA-managed communities, you might have to pay one month’s dues at closing, which can vary depending on the property and covers maintenance and operational expenses.
Property taxes: Buyers may have to prepay property taxes as part of their closing costs in Connecticut.
How much closing costs are in Connecticut for sellers will vary between each transaction, but here are a few common closing costs that sellers pay for:
Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with their agent.
Homeowners Association fees: If the property is part of an HOA, the seller may need to pay a variety of fees. These can include HOA transfer fees, outstanding dues, and possibly a fee for obtaining HOA documents required by the buyer. The exact fees will depend on the HOA’s rules and regulations.
Property taxes: Any outstanding property taxes will be due at this time. However, if the seller has prepaid property taxes for the period that extends beyond the closing date, they may be credited back for the portion they’ve paid but won’t use.
Title insurance: Sellers typically cover the cost of the buyer’s owner’s title insurance policy. This policy protects the buyer from any potential title issues that may arise after the property is sold. The cost of title insurance can vary but is generally based on the property’s sale price.
Transfer taxes: In Connecticut, there is a state levied tax on the transfer of ownership of a property. Sellers can expect to pay a one-time transfer tax as part of closing costs. There may also be additional taxes levied by local governments, such as counties and cities.
Median home sale price data from the Redfin Data Center during July 2024.
If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our
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Mekaila is a Marketing Program Manager at Redfin and has spent the last 5+ years covering topics like interior design, real estate trends, and buying/selling resources. She lives in the Greater Seattle area and enjoys trying new restaurants, traveling, and spending time with family/friends. She dreams of a modern and warm home with lots of natural light, sunset views, and a backyard perfect for hosting.
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