How much are typical closing costs and what does this include? What can I expect to pay and what can the potential seller expect to pay? When considering comps, should it include the new homes being built? I’ve heard that homes with hardwood or similar flooring sell faster is this true?

-Jamie

Closing costs vary by area of the country and local custom. Here in Florida, buyer costs can range from almost nothing for a cash deal, to 3 percent - 5 percent of the purchase price for financed purchases. I believe it is generally customary for buyers to pay for the costs associated with obtaining financing, while sellers pay the costs associated with selling the real property.

Your second question about comparable sales is a little easier to answer directly. If the home in question is a newer home, then yes new homes could be used as comparables. If the subject property is an older home in an area where new homes are being built, the new homes may not truly be comparable.

Hardwood floors are definitely a selling feature that appeals to a lot of buyers. Anything that sets a home apart such as hardwood, granite, stainless appliances, new fixtures can help sell a home faster. However, these days you cannot expect such upgrades to command a higher sales price.

David Welch specializes in residential re-sales and new home construction at RE/MAX 2000 Realty in and around Orlando, FL.

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Can I lose my initial deposit if I cannot come up with all closing costs? -Cecilia

Probably. The answer to your question depends on the language in the purchase and sale agreement (or contract to purchase) and how your mortgage financing contingency and other terms and conditions are worded. Most “standard form” real estate contracts do not have a contingency for the buyer being able to pay for his/her closing costs that would allow the buyer to cancel the transaction if the costs are too high. And,  by the time you find out the actual costs, it is usually after a financing contingency expires. In the event that you cannot pay the closing costs, your deposit could be in jeopardy. Our advice would definitely be to hire a licensed attorney to review and negotiate appropriate language prior to signing a written contract or purchase and sale agreement. Also, you should ask for and receive a good faith estimate and truth in lending disclosure from your mortgage professional as early in the process as possible so that you will have a general estimate on what to expect in terms of closing costs, settlement charges, pre-paid items and your principle and interest payment after closing. If you have any additional questions, your local REALTOR® should definitely be able to answer them.

David Kres is a REALTOR® for Buyers Brokers Only LLC in NE/Southern MA.

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