If you're on the hunt for a new home or condo in the Greater Boston area, or for that matter anywhere in Massachusetts, you're probably aware that there are "closing costs" associated with purchasing and closing on a new home. If you've spoken with a lender, perhaps they's mentioned them. But the patchwork of charges and fees can be confusing, particularly if you are a first time home buyer.
On this page, we attempt to straighten that all out for you.
All costs are approximate. Not included here are any of the inspections you may have done on your new property, which you will pay for as they happen.
Buyer Closing Costs
I. GOVERNMENT RECORDING CHARGES
These are the fees that the Mass Registry of Deeds charges to officially record the transaction.
- Recording the deed: $155+-
- 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
- Recording the Mortgage: $205
- 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 claims. If you elect to have one (which you should), your attorney will charge you somewhere between $65 and $150+- to prepare it.
There are potentially other fees, but these are the most common.
II. TITLE CHARGES
- 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
- 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.
- Title insurance: Between $3.65 and $4.00 per thousand. This policy is effective for the lifetime of your ownership. 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.
- Obtain Municipal Lien Certificate (MLC) $25-$50+- depending upon the municipality.
- Obtain a plot plan: $175+-. Mostly for single-family homes, but might be obtained for a condo purchase if relevant.
II.MORTGAGE RELATED CHARGES
- Loan origination fee: Up to about 1.5% of the mortgage value. Sometimes on a closing statement, you will see it broken up into the categories of processing, document prep, and underwriting.
- Appraisal and related review: $400-$1,500+- depending upon the size of the property.
- Credit report: $30-100+-
- Flood Certificate: $3.75-$5+-. Provides lender with flood status of the location of the property.
- 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.
- Prepaid interest. Interest that will accrue on the mortgage from the closing date until the first monthly mortgage payment is due.
IV. PRO-RATA
- R.E. Taxes: You will pay the pro-rated remaining quarterly taxes.
- Condo fees: You will pay the pro-rated remaining condo fee for the month.
IV. MISCELLANEOUS
- 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.
- 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.
- Wire, FedEx, courier: $50-$200+-
TYPICAL CLOSING COSTS SUMMARY
Based upon a $1m transaction:
- Registry of deeds recording fees: $475+-
- Title exam: $250+-
- Rundown Fee:$50+-
- Title insurance (owner's equity portion optional optional): $3,650-$4,000+- Based upon sale price of $1m
- Obtain MLC: $25-$50+-
- Obtain plot plan (single family): $175+-
- *Mortgage origination fee: $1,200+-
- *Appraisals and reviews: $400-$1500+-
- *Credit report: $30-$100+-
- *Flood certificate: $5.00+-
- *2 month properrty tax impound: $1,800+-
- *Prepaid interest: Varies upon closing date
- Pro-rata balance of quarterly taxes: varies
- Pro-rata balance of monthly condo fee: Varies
- Buyer attorney fee: $600-$1,500+-
- Decl. of homestead prep by buyer attorney: $65-$150+-
- Wire/courier: $50-$150+-*
Starred line items only apply if your purchase is being financed.
If you have any questions, or would like to discus this or any real estate need, please contact me at 617.584.9790 or joe.wolvek@sothebysrealty.com
