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Closing costs in Massachusetts

If you’ve been thinking about buying or selling real estate in MA, you’ve more than likely heard the term, “closing costs.” Sounds like a vaguely mysterious black box, and maybe a little ominous too, right? Obviously, no one likes paying these, but at least we can spell out what it is that you are paying for, and roughly how much.

All costs are approximate. These costs are different for sellers and buyers. They will vary somewhat by the price of the property, the municipality, the law firms involved, and type of property. 

Seller closing costs

(Click here for buyer costs)

I. GOVERNMENT FEES AND TAXES

  1. Excise/Deed Stamp: The seller pays $4.56 per thousand of the sale price to the state.
  2. Mortgage discharge recording: $105. if you have a mortgage.
  3. Mortgage discharge tracking fee: $50-$150+- depending on the lender. For services rendered by the lender/closing attorney to ensure that your loan is properly paid and recorded within a few days of your closing
  4. 6(d) recording: $105: The 6(d) is a document procured from the homeowners association (if a condo) to ascertain that all regular and special assessments have been paid. If the association is professionally-managed, the management company may charge you for documentpreparation.
  5. Town/city smoke/CO detector certification. $50 in Boston, more in some other places. There may be additional charges relating to services rendered in procuring this certificate. May appear as a reimbursable charge to your broker if they have already paid for it.
  6. Final water reading: $25 for a one to 3 family structure in Boston. May be more in some other cities or towns. May appear as a reimbursable charge to your broker if they have already paid for it.

II. PROFESSIONAL FEES

  1. Broker fee: As per agreement. Generally 5% of the sales price.
  2. Attorney fee: $750-$2,000+-. Usually a flat fee, depending upon the complexity of the transaction.

III. MISCELLANEOUS

  1. 1. Wire and courier fees: $125+-

Buyer closing costs

I. GOVERNMENT RECORDING CHARGES

These are the fees that the Mass Registry of Deeds charges to officially record the transaction.

  1. Recording the deed: $155+-
  2. Recording the Municipal Lien Certificate (MLC) $80. This certifies exactly what is owed for taxes. It’s important because the city/town taxes will have to be pro-rated from the time of purchase
  3. Recording the Mortgage: $205
  4. Recording the Homestead Declaration (if any): $35. A homestead estate provides limited protection of the value of the home, up to $500,000, against unsecured creditor claimsThere are potentially other fees, but these are the most common.

II. TITLE CHARGES

1. Title Exam: $250+-: A qualified title examiner goes through all the records for this home and any previous structure at that address as well as the land it is built upon, in order to ascertain to the extent possible that there are no title issues and that the title is clear

2. Rundown fee: $50+-. The title rundown is a is a continuation of the title search for the day of closing. The searcher checks the records for the time period from the date of the title commitment to the date of closing.

2. Title insurance. Between $3.65 and $4.00 per thousand. Even though you’ve had a title exam, sometimes nasty things from the past crop up, and you don’t want to have to cure those things because sometimes these can be very expensive. So based upon a $1m sale, that’s $4,000+. The buyer pays for a policy to cover the lender’s portion. That’s mandatory. They also pay at closing for a policy to cover their own equity, which is optional. But you should definitely get it.

3. Buyer attorney fee. The buyer attorney is also generally the closing attorney.  Generally between $600 and $1500 (or possibly more) as a flat fee depending upon the law firm and the complexity of the transaction.

4. Obtain Municipal Lien Certificate (MLC) $25-$50+- depending upon the municipality.
5. Obtain a plot plan. $175+-. Mostly for single-family homes, but might be obtained for a condo purchase if relevant.

II.MORTGAGE RELATED CHARGES

1.  Loan origination fee: Up to about 1.5% of the purchase price. Sometimes on a closing statement, you will see it broken up into the categories of processing, document prep, and underwriting.

2. Appraisal and related review: $600-$1,500+- depending upon the size of the property.

3. Credit report: $30-100+-

4. Flood Certificate: $3.75-$5+-. Provides lender with flood status of the location of the property.

5. Property taxes: Usually a 2 month impound by the lender. The municipality is first in line to take the property if the taxes are not paid, so the lender has a very large interest in this.

6. Prepaid interest. Interest that will accrue on the mortgage from the closing date until the first monthly mortgage payment is due.

IV. PRO-RATA

1. R.E. Taxes: You will pay the pro-rated remaining quarterly taxes.

2. Condo fees: You will pay the pro-rated remaining condo fee for the month.

IV. MISCELLANEOUS

1. Buyer attorney fee. The buyer attorney is also generally the closing attorney as well.  Generally between $600 and $1500 (or possibly more) as a flat fee depending upon the law firm and the complexity of the transaction.

2 Condo fees to reserve: If you are buying new construction, you may be asked to pay in 3 months condo fees to contribute to the association’s reserve. 

3. Wire, FedEx, courier, tracking fees. $50-$200+-

If you have any questions, or would like to discus this or any real estate need, please get in touch!

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