All Guides

Woman using computer and notepad to research closing costs

How to Explain Closing Costs to Your Buyers

2-minute read
February 05, 2021

As a real estate agent, you can prepare your buyers for closing cost expenses by going through this helpful list with them. It’s the best way to make sure they understand exactly what they’ll be paying at closing.

Typical Costs of Closing Your Buyers Should expect

While no two home closings are alike (and therefore no two sets of closing costs), here’s an overview of most of the typical costs buyers can expect to pay before you hand them their house keys:

In addition to closing costs, your buyer will need their down payment, water escrow, and EMD. Be sure to schedule some time with your buyers to go over this list! They’ll appreciate gaining a better understanding of what they cover and to expect.

And remember, when you partner with an independent mortgage broker, they will act as your buyer’s go-to mortgage expert. Working with your buyers through the whole home financing process, they will also be able to answer any closing cost questions and help ensure your buyer is well-equipped to sign on the dotted line.

How to Help Buyers Estimate How Much They Should Save

Your buyer’s lender will give them a Loan Estimate document a few days after their loan application is approved. Ensure that your buyer reviews thoroughly and brings up any questions they may have to their independent mortgage broker. Then, prior to closing, they will receive a final Closing Disclosure with exact closing costs. Your buyer needs to compare these two documents closely and find out from their mortgage broker what kind of payment is acceptable. (A cashier’s check is usually preferred, but a wire transfer is usually required for amounts over $5,000.)

If you want to help estimate your buyers’ closing costs, many lenders have an online closing costs calculator you can use that should give them a ballpark estimate of what to expect.

A Prepared Buyer is a Satisfied Buyer

By going through this checklist and estimating your buyers’ closing costs as closely as possible, you’ll take some of the sting out of closing fees — and help make their big day as joyous as possible.

Ready to help make your buyer’s closing day seamless? Partner with an independent mortgage broker today.