When purchasing a home, financial considerations go beyond the selling price. One important expense that many home buyers often overlook are closing costs.
Closing costs are the final fees paid to complete a real estate transaction, such as taxes, lender fees, and title insurance. Let’s break down what closing costs are in Nebraska, who pays them, and what you can expect to pay as a buyer and seller.
What are the closing costs in Nebraska?
Homebuyers need to pay closing costs before getting the keys to their new home. Closing costs in Nebraska typically range from 2%-5% of the home 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’re buying a home in Omaha, where the median sales price is $275,000. Based on this, you can expect closing costs to be between $5,500 and $13,750. However, if you buy a home in Lincoln, where the average sales price is $292,500, closing costs could range from $5,850 to $14,625.
Who pays closing costs in Nebraska?
In most areas, including Nebraska, 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. Another thing to remember is that buyers typically pay closing costs out of pocket, while sellers’ closing costs are typically deducted from the home sale proceeds.
Nebraska Buyer Closing Costs
For home buyers in Nebraska, you can expect to pay 2%-5% of the purchase price of the home. In most cases, you will pay a deposit, usually 1% to 3% of the home price, once the two parties come to an agreement during the home buying process. This deposit will be deducted from your closing costs, reducing the total amount due at closing. 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 fee: Although not required, a home inspection is highly recommended. The cost of a home inspection generally ranges from $300 to $500 and is usually paid at the time of service. However, if not, payment will be required 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: In addition to the origination fee, your lender may charge fees to process your loan. This typically covers coverage and related services. It is recommended to discuss this fee with your lender to see what is covered and if it may be waived.
- 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 upfront 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: In Nebraska, your annual homeowners insurance premium may be part of your closing costs.
- Homeowners Association Dues: For homes in HOA-managed communities, you may be required to pay one month’s dues upon closing, which may vary by property and cover maintenance and operating expenses.
- property tax: Buyers may have to pay property taxes upfront as part of Nebraska closing costs.
Nebraska Seller Closing Costs
The closing costs that sellers pay in Nebraska can vary, but here are some common closing costs that 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 property is part of a homeowners association, the seller is generally responsible for settling any unpaid HOA fees or assessments as of the closing date. Additionally, the seller may be required to provide certain HOA documents to the buyer as part of the sale.
- property tax: Any outstanding property taxes will be due at this time. However, if the seller prepaid property taxes after the closing date, they may receive a refund for the portion that was paid but will not be used.
- Title Insurance: As part of the Nebraska seller’s closing costs, the seller may pay for owner’s title insurance. Typically, this cost is based on the sales price of the property.
- Transfer tax: If you sell your home in Nebraska, you’ll need to pay state-imposed real estate transfer tax. These taxes are usually calculated based on the property’s sales price or assessed value. Specific rates and regulations can vary widely, so it’s important to understand the requirements in your area and consider these potential costs when selling your property.
Median home sales price data from the Redfin Data Center for July 2024.
