Closing costs in Ohio

In any real estate transaction, the final step is the closing. This is where both the buyer and seller contribute to cover the fees and expenses, known as closing costs, associated with the deal. These costs can range from 2 to 5 percent of the loan amount, excluding agent commissions.

In Ohio, as in most states, closing costs encompass fees related to the mortgage loan, title search, appraisal, and any applicable taxes. While the buyer typically bears the majority of these costs, the seller is not entirely exempt. If you’re considering buying or selling a home in Ohio, here’s what you need to know.

Understanding Closing Costs in Ohio

The average rate of closing costs varies by state, and in Ohio, it averages around 2 percent of the home’s sale price, excluding agent commissions. While this rate may be on the higher side compared to neighboring states, like Indiana at 0.9 percent, it’s by no means the highest in the country.

For instance, the median sale price in Ohio was $249,400 in June, translating to median closing costs of just under $5,000. Keep in mind that these figures are based on home prices, so actual costs may fluctuate based on the local market in your specific Ohio location. In cities like Columbus, where the median price is higher at $290,000, or in Cleveland, where it’s surprisingly low at $119,950, the closing costs will differ accordingly.

Who Bears the Closing Costs?

In Ohio, as in any state, both buyers and sellers share some form of closing costs in a real estate transaction. The specific expenses can vary by region within the state. For example, according to Ohio Real Title, the cost of an owner’s title insurance policy may be split between the buyer and seller in Northeast Ohio, but paid entirely by the seller in Central Ohio. Additionally, if you choose to enlist a real estate attorney, the legal fees will also fall under your responsibility.

Closing Costs for Buyers:

For buyers, the majority of closing costs pertain to securing a mortgage loan. If you’re a cash buyer, your closing costs will be significantly lower. Here are some typical fees and expenses that buyers cover:

• Loan application and origination fees
• Credit report check
• Appraisal to determine the home’s value
• Mortgage points (optional, to lower the interest rate)
• Home inspection for assessing potential issues
• Title insurance and search to ensure a clear title
• Escrow for property taxes and insurance

Closing Costs for Sellers:

While buyers might cover the bulk of closing costs, sellers have expenses of their own, especially when factoring in real estate agent commissions, typically between 5 and 6 percent of the sale price. For a median-priced $249,400 Ohio home, this could amount to around $15,000. Other common fees for sellers include:

• Transfer taxes or conveyance fees
• Recording fee for updating the deed
• Title-related fees (if applicable)
• Outstanding property taxes and HOA fees
• Concessions for agreed-upon repairs
• Existing mortgage payoff

Lowering Your Closing Costs in Ohio

While government fees and taxes are non-negotiable, many other closing costs can be subject to negotiation, depending on the local market conditions. In a seller’s market, buyers may have less leverage, while the reverse holds true in a buyer’s market.

Sellers should be aware that realtor commissions, their largest expenditure, can often be negotiated regardless of market conditions. Additionally, buyers may be eligible for various financial assistance programs that help cover down payment and closing costs, especially for first-time buyers.

Conclusion

Whether you’re buying or selling, it’s wise to engage a local real estate agent familiar with your market. Seek recommendations from friends, check online reviews, and interview multiple candidates before making your decision. With the right guidance, you can navigate the closing process in Ohio with confidence.