Congratulations! You?re just a few steps away from closing on your new home in Alaska. But before you can officially close, there’s one last step: pay closing costs.
Closing costs are the taxes and fees associated with the purchase and sale of a home, such as title insurance and lender fees. To help prepare you for the final steps of the homebuying process, this Redfin article will break down how much closing costs are in Alaska, who pays for them, and what costs you can expect to pay as a buyer and as a seller.
How much are closing costs on average in Alaska?
Before securing the keys to your new home, homebuyers will need to pay for closing costs. Closing costs in Alaska typically range from 2%-5% of the home’s purchase price. However, keep in mind that closing cost amounts vary depending on many 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 Anchorage, where the median home sale price is $420,000 . Based on this, you could expect closing costs to be between $8,400 and $21,000 . Whereas if you?re buying a home in Fairbanks, which has a median sale price of $275,000 , closing costs could be anywhere from $5,500 to $13,750 .
Who pays closing costs in Alaska?
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. 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 Alaska
For homebuyers in Alaska, you can expect to pay between 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: 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 buy discount points to lower your interest rate, you’ll pay a one-time fee at closing. These points can lower your rate by 0.25% to 0.5%, but consider your long-term homeownership plans before paying for a reduced rate.
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 Alaska.
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 Alaska.
Seller closing costs in Alaska
How much closing costs are in Alaska 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: 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: 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: Owner’s title insurance is another common closing cost in Alaska paid for by the seller.
Median home sale price data from the Redfin Data Center during July 2024.
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