Often, the buyer will need to cover more of the line-item expenses than the seller. However, the seller will usually pay the commission, which can be a large sum.

Before closing, the buyer and the seller usually understand which costs they are responsible for covering. Once the mortgage loan amount has been established, it’s pretty easy to estimate the closing costs for both sides. However, it’s important to really understand who will pay the closing costs when buying or selling an Aspen home.

Buyers Cover a Larger Number of Costs

Closing Costs

Cost of Closing

Buyers are the ones getting the loan to purchase the home, so it makes sense they will have more costs. Even though both buyers and seller have costs, the buyer will face more line-items, even though the seller usually pays a larger sum.

Buyers will receive a loan estimate form early in the sale process. This form will help to estimate the cost the buyer must face when closing. It helps to keep surprises to a minimum and out of the equation. Often, this form will be used by buyers to shop for a better mortgage with lower costs or a lower interest rate.

The following costs are common for buyers to see when getting a mortgage to buy a new home:

  • Appraisal fee
  • Origination fee
  • Recording fee
  • Notary fee
  • Credit report fee
  • Bank processing fee
  • Tax servicing fee
  • Prepaid interest
  • Prepaid insurance
  • Title insurance

Make sure you go through every fee with your mortgage professional to ensure you understand what you’re being charged and why. Some of the other expenses you may need to pay, as the buyer, may also include a pro-rated amount for property taxes and homeowners association dues. This may depend on the time of the month/year you close on the loan.

Commission is Paid by the Seller

Cost of Closing

The seller will always have fewer line items on the estimated closing statement than the buyer. However, the biggest expense usually falls to the seller, which is the real estate commission.

The commission paid to the real estate agent(s) is a percentage of the total sales price. IT’s almost always the largest fee on the sheet. Sellers may also need to pay a prorated amount for homeowners association dues or the balance of their property taxes, if due.

Sharing Some of the Closing Costs

In some cases, the closing costs can be a very large expense. If you’re the buyer, you may be able to negotiate with the seller to get some of the closing costs covered. For example, instead of negotiating for a lower price, you may want to negotiate for a credit toward closing costs. This may give you more value for your money at closing compared to a few dollars off your mortgage payment every month.

If you’re in the market for a new home in Aspen or you’re selling your Aspen home, it’s important to understand which closing costs you will pay. Make sure you speak with your real estate agent and your mortgage lender to ensure you understand all of the costs before you go to the closing table.