The Bottom Line: How and What to Cut from Closing Costs

In the sale of a home, closing costs can greatly affect your bottom line, whether buying or selling, closing costs such as title insurance, escrow fees and even home warranties are all adding up to thousands. Reducing or even diverting closing costs can be achieved with a little knowledge and flexibility. Remember, negotiation is the name of the game.

Buyers

The purchase of a home can cost the buyer thousands of dollars in closing costs alone. Depending on the market, many of these costs can be redistributed, eliminated or incorporated to lessen this burden.

1. Look at the costs of escrow and title. These fees are based on the selling price of the home you're purchasing. But not all companies charge the same amount. You many not save much by shopping but every penny adds up. Shop at reputable companies or you might just find the $40 you saved is costing you hundreds in other fees due to delays.

2. Home inspectors fees can range substantially so be a shopper and look for the most bang for your buck.

3. Appraisals are another area where you can gain a few bucks. Have your lender give you a list of acceptable appraisers and compare their fees or better yet ask the lender to absorb the fee.

4. Ask the seller for a credit for closing costs. This is a common practice in a buyers market. Often buyers can get a credit for all their closing costs.

5. In a sellers market add closing costs to the price of the home. This is called stacking your closing costs and adds the amount to the cost of the home rather than the seller paying. For example: A home costing $200,000 with closing costs of $3,000 the buyer would offer the seller $203,000 for the home with a $3,000 credit for closing costs. Some loans may limit the amount you stack. Look to your agent for advice.

6. Whittle away lender fees by asking questions and using good judgment. Sometimes a slightly higher interest rate will have lower fees. If you plan on staying in you home a short time this may be an option for you.

Sellers

Seller closing costs usually consist of title and escrow fees along with fees paid for property inspections required by lenders. These inspections include termite inspections, well inspection and water testing if applicable as well as septic certification if required. Sellers can reduce or eliminate some of these costs. Knowing which ones to adjust is the key.

1. Termite inspections on recently built

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