How Much Are Closing Costs in Missouri 2024?

Buying a new home is an exciting and big decision, whether it’s your first time buying a home or your third. But before you dive too deep into buying new furniture or appliances, you’ll want to consider how much you’ll need to pay for closing costs.

Closing costs are the final expenses that need to be paid in order to close on a real estate transaction, such as taxes, lender fees, and title insurance. 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 Missouri, 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 Missouri?

Before securing the keys to your new home, homebuyers will need to pay for closing costs. On average, closing costs in Missouri typically range between 2%-5% of the home’s purchase price. However, keep in mind that closing cost amounts vary depending on a few 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 St. Louis, where the median home sale price is $235,000. Based on this, you could expect closing costs to be between $4,700 and $11,750. Whereas if you’re buying a home in Springfield, which has a median sale price of $200,000, closing costs could range from $4,000 to $10,000.

Who pays closing costs in Missouri?

Generally, both buyers and sellers can expect to pay closing costs. But the buyer and seller will pay for different closing costs and likely have different total closing cost amounts. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are deducted from the home sale proceeds.

Buyer closing costs in Missouri

Closing costs in Missouri for homebuyers tend to 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: 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: Most lenders charge a fee for creating your loan. Be sure to check with your lender what this fee covers and if it can be waived or negotiated.
• 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 closing cost, with buyers commonly paying for both lender and owner policies.
• Homeowners insurance: Your annual homeowners insurance premium may be included in your closing costs in Missouri.
• Homeowners Association dues: If your property is part of a homeowners association, you’ll likely pay one month’s dues upfront at closing. These fees vary and contribute to maintenance and operational costs.
• Property taxes: As part of closing costs in Missouri, you may be required to prepay a portion of your property taxes at closing.

Seller closing costs in Missouri

The closing costs covered by sellers in Missouri can vary, 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: Sellers are generally responsible for settling any outstanding HOA fees or assessments up to the closing date, and they may need to provide HOA documents to the buyer as part of the sale.
• 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: Owner’s title insurance is another common closing cost in Missouri paid for by the seller.

Median home sale price data from the Redfin Data Center during July 2024.