Buying a new home is an exciting and big decision, whether it’s your first home or your third. But before you dive too deep into furniture shopping, picking out new colors for your bathroom, or re-designing your backyard, you’ll want to budget for 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. To help prepare you for the final steps of the homebuying process, this Redfin article will break down how much closing costs are in South Carolina, who pays for them, and what costs you can expect to pay as a buyer and as a seller.
How much are closing costs in South Carolina?
In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Closing costs in South Carolina typically range from 2%-5% of the home’s purchase price. But it’s important to remember that this is just a range and the total amount will depend on various factors, such as the buyer’s loan program or negotiations made with the seller.
Let’s say you’re buying a home in Greer, where the median home sale price is $300,000. Based on this, you could expect closing costs to be between $6,000 and $15,000. Whereas if you’re buying a home in Myrtle Beach, which has a median sale price of $270,000, closing costs could range from $5,400 to $13,500.
Who pays closing costs in South Carolina?
Usually both the buyer and the seller pay closing costs in South Carolina. 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 South Carolina
Closing costs in South Carolina for homebuyers typically range between 2%-5%. If you paid earnest money, this amount will typically 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. Below are some of the common closing costs paid for 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: Although not required, a home inspection is highly recommended. Home inspections in South Carolina 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: Your lender may charge a fee for creating your loan. It’s important to inquire about what this cost covers and whether it’s negotiable to potentially avoid high costs.
- 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: Your annual homeowners insurance premium may be included in your closing costs in South Carolina.
- 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 South Carolina.
Seller closing costs in South Carolina
How much closing costs are in South Carolina for sellers will vary between each transaction, but below are some of the common fees and costs that a seller pays 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: 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: As part of closing costs for sellers in South Carolina, sellers may pay for owner’s title insurance. Typically, this cost is based on the home’s sale price.
- Transfer taxes: In South Carolina, there is a state levied tax on the transfer of ownership of real estate. 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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