Congratulations! You’re only a few more steps away from closing on your new home. But before you can officially get the keys, one of the last steps is to pay closing costs.
Closing costs are the fees and expenses associated with finalizing a real estate transaction and transferring ownership of a property from the seller to the buyer. 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 Oklahoma, 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 Oklahoma?
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 Oklahoma can range anywhere 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 buyer’s loan program or negotiations made with the seller.
For example, if you’re buying a home in Oklahoma City, which has a median sale price of $270,000, closing costs could range anywhere from $5,400 to $13,500. Or, let’s say that you’re buying a home in Tulsa, which has a median sale price of $242,500. Closing costs for a home here could be between $4,850 and $12,125.
Who pays closing costs in Oklahoma?
In most areas, including Oklahoma, both the buyer and the seller will 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 Oklahoma
Closing costs in Oklahoma for buyers typically range between 2%-5%. If you’ve paid earnest money, which is typically 1%-3% of the home’s price, this amount will be subtracted from your closing costs. Let’s break down some of the common closing costs covered by the buyer:
- 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: When buying a home in Oklahoma, a home inspection is highly recommended. 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: 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: 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): 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: Your annual homeowners insurance premium may be included in your closing costs in Oklahoma.
- 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: Buyers may have to prepay property taxes as part of their closing costs in Oklahoma.
Seller closing costs in Oklahoma
The closing costs covered by sellers in Oklahoma 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: 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: Sellers typically cover the cost of the buyer’s owner’s title insurance policy. This policy protects the buyer from any potential title issues that may arise after the property is sold. The cost of title insurance can vary but is generally based on the property’s sale price.
- Transfer taxes: In Oklahoma, 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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