I am in the process of buying a house. The seller agreed to pay the closing cost. What does the closing cost cover?

I was told to pay for pest control, home inspection, and home survey. I wanted to know if the seller is paying for the closing cost, why am I paying for all this. I thought that was covered in the closing cost. By the way, the seller agreed to pay 5,000 in closing cost. Am I paying this upfront and when the closing of the house is complete, will I get the money back? I know the attorney doesn't get 5,000 dollars for only closing. It has to cover other things. Someone help me.

8 Answers

  • 3 years ago

    The items you have listing are your responsibility to pay. Closing costs are the charges made by your lender including pre paid interest, insurance, taxes and lender's title policy.

  • 3 years ago

    Pest control, home inspection and a survey are all optional and are NEVER paid by the seller. If you want them, you pay for them. They are never part of closing costs. Closing costs are the actual costs that your lender charges, title searching - I never paid a whole lot of attention to it and I can't recall every little thing off the top of my head, especially at this hour but, they have nothing to do with the three things you mentioned. Why would you get closing costs back? Especially when you are not paying for them! You said the seller offered to pay for them. So, if they were going to be returned/refunded, that money would go to the seller, not you. When you are presented with the papers, all of the closing costs will be itemized. You will be able to see for yourself what they entail.

    Source(s): Certified Paralegal, with 25+ years' experience & with Real Estate law experience.
  • tro
    Lv 7
    3 years ago

    the inspections, the searches the charges that any normal purchase process involves normally the buyer and seller share but if he has offered to pay all this is his way of actually reducing the cost to you giving you some advantage in the purchase price

  • Anonymous
    3 years ago

    You are buying the house and to me the seller is being very generous so stop b@@ching about the expenses YOU have to cover.


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  • Dan B
    Lv 7
    3 years ago

    There are several costs related to buying a home. Depending upon the financing source and if it is a gov't backed mortgage, some costs must be paid by the seller, some must be paid by the buyer.

    Here is a partial list of the closing costs and who normally pays the costs (B = Buyer, S = Seller)

    B 1st year's property tax

    B Homeowner's insurance

    B Appraisal

    B Loan origination fee

    S Any repairs needed to get the loan approved

    S Real estate agent commission

    B Title insurance

    B Flood insurance (if in a flood plain)

    B Credit report

    B Recording fee (for recording the deed)

    B Notary fee

    B Home inspection

    If the closing costs exceeds $5,000, you pick up the rest.

    In the end, the seller pays a higher %age of the fees (real estate agent fee of about 6%) where the buyer pays about 3.5% for all the above fees.

    Of course all of this is negotiable to some extent.

    The seller agreeing to pay $5,000 toward your closing cost is probably done this way. They might have raised the selling price of the home by $5,000. Then apply that to your closing costs. "There ain't no free lunch" as the saying goes.

  • Anonymous
    3 years ago

    The pre-paids such as homeowner's insurance for the year and reimbursing the seller for the property tax they paid in advance are not closing costs. They are paid at closing, but they will be paid by you.

    The "up to 5k" will go for things like paying the escrow fee/closing agent, recording fee, courier, etc.

    The law requires that you be given a Good Faith Estimate of all settlement costs. If you are "in the process" of buying a house, you should already have this.

    People often confuse "costs paid at closing" with "closing costs". Two different things. Even if the seller pays the closing costs, you will still likely have a couple/few grand of "costs paid at closing".

  • Kenny
    Lv 7
    3 years ago

    Closing cost is the paper work done by the escrow company. Checking if the title is clean, calculating % payment to ppty, tax, HOA, etc... You write pay the cost of the house say $300,000 to the escrow company and they will then pay the seller minus the closing cost. The seller will receive $295,000 instead of $300,000 you have paid.

  • 3 years ago

    The seller agreed to cover $5,000 of your closing costs. Anything above that comes out of your pocket.

    It's usually a good idea to pay for pest control as the buyer, so the service provider is liable to you if there's any problem. Ditto for the inspection. The survey could go either way, though local laws may require the buyer to pay it.

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