You found your dream home. You made an offer and it was accepted - conditionally. Now it's time for closing. Also known as "settlement," closing is the final part of the house buying process. It's when ownership is officially transferred to the buyer. But there are a few costs involved.
Who Pays Closing Costs in Maine?
It depends. Some are covered by the buyer. Some by the seller. We'll mention a few of the most common closing costs here, but be aware that there are many more possibilities.
Let us break it down for you:
Closing Costs Covered by the Buyer
- Inspection, Appraisal fees, and Title Search
The buyer pays for the home to be inspected for potential problems since it really only benefits them. This is also the case with the appraisal to verify the value of the property and the title search to determine if the buyer is receiving a clear "title" or deed.
- Home Warranty Payments
The home warranty is usually paid for at closing. Often during negotiations, the seller and buyer work out who will be responsible to pay this fee.
- Property Insurance Payments
The cost to insure the home is the new owner's responsibility. The first year of insurance is often paid for during closing.
Closing Costs Covered by the Seller
- Property Taxes
Property taxes are prorated based on the tax year of the home's municipality and are generally split between both parties, with the seller responsible for the taxes occurring during their ownership.
- Brokerage Commission
The seller of the home pays the Realtors at closing. This commission is a percentage of the sale price and is shared between the listing Realtor and buyer's agent.
- Deed Preparation Fees
Since the seller is the one conveying the property, he or she is responsible for paying an attorney to prepare the deed that transfers ownership of the home to the buyers.
This same attorney is also responsible for preparing the transfer tax form; however, the buyer and seller are both responsible for paying transfer tax to the state of Maine in the amount of $1.10 per $500 of the sales price.
Optional Closing Costs
- Courier Fees
A courier may be used to ensure all documents are received in a timely a manner. This fee is paid by whichever party requests it.
What is NOT Included in Closing Costs?
The down payment! Oddly enough, many first time homebuyers assume that the down payment is factored into the costs of closing on their home, when in fact it's completely separate.
You found your dream home. You made an offer and it was accepted - conditionally. Now it's time for closing. Also known asï¿½ "settlement," closing is the final part of the house buying process. It's when ownership is officially transferred to the buyer. But there are a few costs [...]