Buying a home in North Dakota means you’re about to enjoy the vast landscapes and welcoming communities, but first, there’s one important step: paying your closing costs. Closing costs in North Dakota can add up quickly, covering everything from appraisal fees to title insurance. Let’s break down how much closing costs are in North Dakota, who pays for them, and what costs you can expect to pay as a buyer and as a seller to help you prepare for a smooth closing.
How much are closing costs in North Dakota?
Before securing the keys to your new home, homebuyers will need to pay for closing costs. As a general rule of thumb, you can expect closing costs in North Dakota to add up between 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on a number of factors, such as the buyer’s loan program or negotiations made with the seller.
Let’s say you’re buying a home in Fargo, where the median home sale price is $315,000. Based on this, you could expect closing costs to be between $6,300 and $15,750. Whereas if you’re buying a home in Grand Forks, which has a median sale price of $260,000, closing costs could range from $5,200 to $13,000.
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In most areas, including North Dakota, both the buyer and the seller will 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 North Dakota
Closing costs in North Dakota for homebuyers typically range from 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. 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 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: 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: In addition to the origination fee, your lender may also charge a fee for processing your loan. This typically covers underwriting and related services. It’s recommended to discuss this fee with your lender to understand what this fee covers and if it can be waived. 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): Required for down payments under 20%, PMI might involve an upfront fee at closing, depending on the loan type. It’s usually part of your monthly payment, but some loans offer the option to pay it as a one-time fee. 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 North Dakota, 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: Buyers may have to prepay property taxes as part of their closing costs in North Dakota.
How much closing costs are in North Dakota for sellers will vary between each transaction, but here are some of the common fees and costs covered by sellers: 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 a homeowners association, sellers are usually responsible for settling any outstanding HOA fees or assessments up to the date of closing. Additionally, sellers may need to provide certain 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 North Dakota paid for by the seller.
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.
