As you near the final steps of buying a home in Delaware, it’s important to plan for closing costs. These expenses cover everything from title services to recording fees, and they can vary based on the property’s location and price. Being prepared for these costs ensures you won’t be caught off guard as you wrap up your home purchase. Let’s break down how much closing costs are in Delaware, who pays for them, and what costs you can expect to pay as a buyer and as a seller.
How much are closing costs in Delaware?
In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Generally speaking, closing costs in Delaware can range anywhere from 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 Wilmington, where the median home sale price is $260,000. Based on this, you could expect closing costs to be between $5,200 and $13,000. Whereas if you’re buying a home in Dover, which has a median sale price of $287,995, closing costs could be anywhere from $5,760 to $14,400.
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Usually both the buyer and the seller pay closing costs. 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 Delaware
For homebuyers in Delaware, you can expect closing costs to range 2%-5% of the purchase price. 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. Here are a few common closing costs that buyers typically cover:
Appraisal fee: Home appraisals, which typically range from $300 to $500, are usually paid for separately at the time of the service. However, if not, you’ll need to pay for this at closing.
Inspection fee: Home inspections generally range from $300 to $500 – they can vary based on local rates and the property’s specific characteristics. If you don’t pay for the inspection at the time of service, this will need to be paid at closing.
Loan origination fee: Some lenders charge a fee for creating your loan. As you shop around for lenders, inquire about what it covers and whether it’s negotiable to avoid high fees.
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: In Delaware, your annual homeowner’s insurance premium may be part of your closing costs.
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: As part of closing costs in Delaware, you may be required to prepay a portion of your property taxes at closing.
How much closing costs are in Delaware 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: Sellers are responsible for any property taxes that have accrued but not yet been paid up to the closing date. These unpaid property taxes are typically prorated for the months that you owned the property.
Title insurance: As part of closing costs for sellers in Delaware, sellers may pay for owner’s title insurance. Typically, this cost is based on the home’s sale price.
Transfer taxes: In Delaware, 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.
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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.
