Here is a breakdown of the biggest closing costs usually paid by sellers in New Hampshire:
1. Title Insurance
Title insurance protects both the buyer and the seller from financial losses due to title defects, which are errors or problems with the legal ownership of the property. These defects can arise from various sources, such as forged documents, undisclosed heirs, or liens that were not properly recorded. Title insurance can reimburse the insured for legal fees, losses, and damages if there are any problems with the property’s title.
Average Cost: $500-$600
2. Deed Prep Fee
The deed prep fee covers the cost of preparing the legal document that transfers ownership of the property from the seller to the buyer. This document, known as the deed, must be signed by both parties and recorded with the county clerk’s office to officially transfer ownership.
Average Cost: $50-$100
3. Recording Fees
Recording fees are paid to the county clerk’s office for recording the deed and other closing documents, such as mortgages and liens. These fees help to maintain public records and ensure that property titles are accurate.
Average Cost: $25-$50
4. Transfer Taxes
Transfer taxes are imposed by the state and municipality where the property is located. These taxes are based on the sale price of the property and are used to fund various government services, such as schools, roads, and parks.
Average Cost: 0.75% of the sale price
5. Attorney Fees
While not mandatory, consulting with a real estate attorney can be beneficial for FSBO sellers in New Hampshire. Attorneys can help review contracts, address legal concerns, and ensure compliance with state laws.
Average Cost: $500-$1,000
Additional Closing Costs
In addition to the major costs mentioned above, there may be other minor closing costs that sellers may incur, such as:
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Prepaid interest: This is the interest paid on the mortgage loan from the closing date to the end of the month.
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Lender origination fee: This is a fee charged by the lender for processing and underwriting the mortgage loan application.
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Mortgage insurance premium (MIP): This is a fee paid by FHA or VA loan borrowers to protect the lender in case of foreclosure.
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Survey (lender’s) fee: This is a fee paid for a land survey, which is required by some lenders to verify the property boundaries and identify any potential encroachments.
It is important to note that these are just averages, and your actual closing costs may vary depending on a number of factors, such as the type of property you are selling, the lender you are using, and the location of the property.