How to negotiate your perfect closing costs

Contrary to popular misconception, closing costs affect both the buyer and the seller. Both parties should be aware of their own obligations and avoid paying too much.

Naturally, the most expensive closing costs are the ones that you should be focusing on. The most expensive costs for the seller are the commission for the real estate agents, and the title policy legal fees. The most costly ones for the buyer are the closing costs associated with the mortgage, and survey and appraisal fees.

Lower Closing Costs for Buyers

Due to the recent subprime mortage mess, most mortgage lenders will require the buyer to bring a cheque for closing costs and pay a significant down payment. This could potentially be a good situation for the buyer, as there will be lower interest rates.

The buyer can also ask for the seller to pay for a portion of the closing costs, although it is much easier to ask your real estate agent to negotiate for you. One upside of this is that this can increase the selling price, and thus the written value, of your home. This increases the appraisal fees, and can increase the mortgage loan amount (as they are calculated as a percentage of the home value) if you are having trouble with financing the current down payment.

Lower Closing Costs for Sellers

The buyer can negotiate the purchase commission charged by the real estate agent. While there is these are very hard to lower, the buyer must remember that there is no set commission fee.

Just as with utility costs, the responsibility for the fees associated with the property''s owner's title exchange is can be transfered from the seller or buyer. The seller normally takes on the costs for these title legal fees, but look to see if the buyer is willing to pay for them, especially if they are getting a great deal. One important thing to note is that the fee itself, however, is fixed by the state.