Closing Costs in Georgia

Whether you’re on the brink of acquiring your dream home in Georgia or in the process of selling your current property due to an exciting job opportunity in another state, understanding closing costs is crucial. These expenses, incurred when finalizing a real estate transaction, play a significant role in the process. In this guide, we’ll delve into the specifics of closing costs in the Peach State, providing you with essential information to navigate this critical phase.

How much are closing costs in Georgia?

In Georgia, closing costs typically amount to an average of 1.3 percent of the home’s sale price. This figure, based on data from CoreLogic’s ClosingCorp, aligns with neighboring states like Alabama (1.4 percent) and South Carolina (1.2 percent).

As of August 2023, the median home price in Georgia stood at $372,300. Consequently, average closing costs in the state would be around $4,840. However, it’s important to note that these figures can vary significantly depending on your location. For instance, in Atlanta with a median sale price of $416,500, closing costs would amount to approximately $5,414. Conversely, in Macon, where the median price is $190,995, the closing costs would be around $2,483.

Who pays closing costs in Georgia: buyers or sellers?

In Georgia, both buyers and sellers share the responsibility of covering specific closing costs. The state mandates the presence of a real estate attorney during the closing process, and legal fees are included as part of the closing costs. Let’s take a closer look at how this breakdown occurs:

Closing costs for buyers

For buyers, a significant portion of the closing costs is associated with the mortgage loan. These expenses may include:

1. Lender-related fees: These encompass charges for application processing, credit checks, and loan origination, among others.
2. Mortgage points: Opting for mortgage points to lower the interest rate involves paying about 1 percent of the loan amount per point, with each point reducing the rate by 0.25 percent.
3. Home appraisal: Lenders require a professional appraisal to ensure the home’s value aligns with the loan amount.
4. Home inspection: While not obligatory, a home inspection can uncover potential structural or safety issues, providing an opportunity for negotiation or repairs.
5. Title insurance and search: Typically, buyers in Georgia obtain title insurance policies for both themselves and the lender to safeguard against any title-related issues.

Closing costs for sellers

Sellers generally bear fewer closing costs than buyers, but the total amount can be higher due to real estate commissions. These commissions, accounting for 5 to 6 percent of the home’s sale price, represent the most substantial closing cost for sellers. Additionally, sellers may also incur expenses such as:

1. Transfer taxes: Georgia’s real estate transfer tax, charged at a rate of $1 for every $1,000 in home value, is typically paid by the seller.
2. Title-related fees: Negotiable fees that sellers may be responsible for.
3. Outstanding property taxes and HOA fees: Any unpaid property taxes or HOA fees must be settled at closing.
4. Existing mortgage payoff: Any outstanding mortgage balance is usually deducted from the sale price and transferred to the mortgage company.

Lowering your closing costs in Georgia

Many closing costs are negotiable, providing opportunities for both buyers and sellers to potentially reduce expenses. For sellers, negotiating realtor commissions can lead to significant savings. Buyers, especially first-time buyers, may qualify for Georgia’s homebuyer assistance programs, which can help alleviate some of the costs associated with purchasing a home. Additionally, depending on market conditions, buyers may be able to negotiate with sellers to share some of the closing costs, facilitating a mutually beneficial deal.

Finding a local real estate agent

Collaborating with an experienced local real estate agent is paramount for a seamless transaction, regardless of whether you’re buying or selling. Seek recommendations from trusted sources, peruse online reviews, and explore local advertisements. Conduct interviews with multiple candidates to find an agent you feel comfortable with and can trust to guide you through the process.

In conclusion

understanding closing costs in Georgia is crucial for a successful real estate transaction. By familiarizing yourself with the intricacies of these expenses, you can navigate the process with confidence, whether you’re buying or selling a property in the Peach State.