Whether it’s your first home or your second, buying a new home is an exciting and important decision. But before you start ordering new furniture or appliances, you need to consider how much closing costs you’ll pay.
Closing costs are the fees and expenses associated with completing a real estate transaction and transferring ownership of the property from seller to buyer. Don’t worry if you feel unprepared or overwhelmed. To help you budget for closing costs, this Redfin article will explain how much closing costs are in Ohio, who pays them, and what you can expect to pay as a buyer and seller.
What are the average closing costs in Ohio?
Homebuyers need to pay closing costs before getting the keys to their new home. On average, closing costs in Ohio can be expected to range from 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on many factors, such as the purchase price of the home, the type of loan and any adjustments negotiated with the seller.
Let’s say you want to buy a home in Columbus, where the median sales price is $285,000. Based on this, you can expect closing costs to be between $5,700 and $14,250. However, if you buy a home in Cincinnati, where the average sales price is $280,000, closing costs may range from $5,600 to $14,000.
Who Pays Ohio Closing Costs?
In most areas, including Ohio, both the buyer and seller will pay closing costs. But buyers and sellers will pay different closing costs and may have different total closing cost amounts. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are usually deducted from the home sale proceeds.
Ohio buyer closing costs
Closing costs for Ohio buyers typically range from 2%-5%. If you pay a security deposit (usually 1%-3% of the home price), this amount will be deducted from your closing costs. Here are some common closing costs buyers pay:
- Assessment fee: Your mortgage lender will require a home appraisal to make sure the home is worth equal to or greater than the loan amount. A home appraisal typically costs between $300 and $500, depending on location. If you pay at the time of service, it will not be included in your closing costs.
- Inspection fees: Home inspection fees generally range from $300 to $500, with costs varying based on local rates and the specific characteristics of the property. If you did not pay for the inspection at the time of service, you will need to pay it at closing.
- Loan origination fee: Your lender may charge a fee to create your loan. It’s important to understand what this fee covers and whether it can be negotiated to avoid high fees.
- Loan processing fee: Lenders may also charge a fee for loan processing, including underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible exemptions.
- Loan discount points: If you buy points to get a lower interest rate, you’ll usually pay a one-time fee at closing. Each point can lower your rates by 0.25% to 0.5%. Before purchasing points, consider your long-term plans, such as how long you plan to own the home or whether you plan to refinance.
- Private Mortgage Insurance (PMI): When your down payment is less than 20%, you usually have to pay PMI. Some loans allow PMI to be paid up front at closing, giving you the option of a higher upfront cost or increased monthly payments.
- Title Insurance: Title insurance is a one-time closing cost, and the buyer usually pays for both the lender and the owner’s policy.
- Home Insurance: Your annual home insurance premium may be included in your closing costs in Ohio.
- Homeowners Association Dues: If your property is part of a homeowners association, you may be required to pay one month’s dues upfront at closing. These fees vary and add to maintenance and operating costs.
- property tax: Buyers may have to prepay property taxes as part of Ohio closing costs.
Ohio Seller Closing Costs
Closing costs for sellers in Ohio will vary per transaction, but here are some common closing costs sellers pay:
- Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with an agent.
- Homeowners Association Fees: If the home is part of a homeowners association, the seller is generally responsible for any unpaid HOA fees or assessments prior to the settlement closing date. Additionally, the seller may be required to provide certain HOA documents to the buyer as part of the sale.
- property tax: The seller is responsible for any property taxes accrued but not yet paid prior to the closing date. These unpaid property taxes are usually prorated based on the months you owned the property.
- Title Insurance: Owner’s title insurance is another common closing cost paid by the seller in Ohio.
- Transfer tax: In Ohio, the seller is responsible for paying state taxes and possible local transfer taxes. These taxes are usually a percentage of the property’s sales price and vary widely by jurisdiction.
Median home sales price data from the Redfin Data Center for July 2024.
