Who pays closing costs in Oregon?

Whether you’re buying or selling a home in Oregon, understanding closing costs is crucial. These expenses cover various aspects of the transaction, including legal fees, appraisals, and credit checks. In Oregon, closing costs typically amount to about 0.9% of the home’s sale price, which is relatively low compared to neighboring states. This guide will break down the costs involved and who is responsible for them.

Closing Costs in Oregon

Closing costs in Oregon average around 0.9% of the home’s sale price. For example, on a median-priced home of $502,000, this would amount to approximately $4,518. However, prices can vary significantly depending on the location. In Bend, with a median price of $725,000, closing costs would be around $6,525, while in Pendleton, with a median price of $269,900, they would be about $2,429.

Who Pays for Closing Costs in Oregon?

Both buyers and sellers share the responsibility for closing costs in Oregon. While specific expenses may lean towards one side or the other, it’s essential to note that legal fees, although not mandatory in Oregon, can be considered part of the closing costs.

Closing Costs for Buyers

Buyers typically incur mortgage-related fees, including:

1. Lender Fees: These can include application fees, credit report charges, and loan origination fees.
2. Appraisal: This is an essential step to determine the home’s value, usually costing around $500.
3. Home Inspection: Investing in a thorough inspection can uncover any potential issues, costing a few hundred dollars.
4. Title Costs: This includes a title search to ensure the property is free of liens and title insurance to protect against future problems.
5. Escrow: Buyers may need to pay property taxes and homeowners insurance upfront, which is held in an escrow account.

Closing Costs for Sellers

Sellers are typically responsible for the following costs:

1. Realtor Commissions: Real estate agents’ fees, usually around 5-6% of the home’s purchase price.
2. Title Fees: The seller usually covers the owner’s title insurance policy.
3. Transfer Taxes: Washington County is the only county in Oregon that charges a tax for property ownership transfer.
4. Property Taxes and HOA Fees: Any outstanding balances need to be settled at closing.
5. Concessions: If the seller agrees to cover certain costs for the buyer, these will be due at closing.
6. Wire Transfer Fees: There may be a modest fee to wire the remaining mortgage amount to the mortgage company.

Lowering Your Closing Costs

While some costs, like state taxes, are non-negotiable, there are opportunities to save on others:

• Sellers can negotiate agent commissions, potentially saving thousands of dollars.
• Buyers can negotiate for the seller to cover part of the closing costs, especially if issues arise during the inspection.
• Explore eligibility for down payment assistance or first-time homebuyer programs, which can help cover some of the costs associated with buying a home.

Conclusion

Understanding closing costs is essential for a smooth real estate transaction. In Oregon, both buyers and sellers have responsibilities, and negotiation can play a significant role in reducing these expenses. Partnering with an experienced local real estate agent can be invaluable in navigating the complexities of the process. They can provide crucial insights and ensure all paperwork is handled correctly.