I’m often asked by my clients how much home buying closing costs are in Northern Virginia, so I thought I’d write a blog post about it. Unlike in some other states, closing costs between buyers and sellers in Northern Virginia are not split evenly, but rather the buyer and seller are responsible for covering their own costs at settlement.
What Are the Typical Home Buying Closing Costs in Northern Virginia?
Your closing costs as a buyer typically add up to anywhere from 2% to 3% of the sales price of the property. Here’s a look at the fees that make up the bulk of your home buying closing costs:
- Lender fees
- Loan origination fee
- Appraisal fee
- Prepaid interest
- Homeowner’s insurance (often called hazard insurance)
- Title insurance (both lender’s and owner’s)
- Title services
- Government taxes
- Prorated property taxes and condo or HOA fees
- Property taxes and homeowner’s insurance fees that your lender escrows in order to make payments on your behalf
A great way to get a specific idea of the closing costs that relate to your loan is to talk to your lender about the numbers when you get pre-approved. One thing to keep in mind is that your home buying closing costs will be significantly lower if you pay all cash for your home instead of getting a loan.
Keep in mind that your home inspection fee is not a closing cost and is paid up front at the time of your inspection, sometime after you go under contract to purchase your home.
In order to offset home buying closing costs, Northern Virginia homebuyers sometimes ask for seller subsidies. With a seller subsidy, the seller gives a certain amount of their net proceeds from the sale to the buyer to help pay for their closing costs. It’s important to think of seller’s subsidies not as free money, but as the same thing as the seller receiving a lower sales price on their property. That said, seller subsidies are common in Northern Virginia, and they are a great way to help a buyer afford a home and allocate money toward their down payment.