Closing
costs on a real estate transaction can take many forms and can vary
widely. Lender fees, title company
closing costs, and transfer fees are just a few of the ingredients that can
push up closing costs.
Bankrate.com’s 2012 annual survey of closing costs shows that Colorado has the third lowest
closing costs, on average, of any of the 50 states. The Bankrate survey showed average closing
costs of $3,199 for Colorado, leaving only Missouri ($3,006) and Kansas
($3,193) with lower average closing costs.
Different
states use different processes and procedures for settling real estate
transactions.
New York is a state where buyers and sellers usually hire attorneys to prepare closing documents and attend closing. That, obviously, is why New York ranks #1 on the list of most expensive states.
California
and Nevada are “escrow states”, where buyers and sellers hire a third party
entity called an escrow company to prepare documents, ensure adherence to
contract terms and receive and disburse settlement funds.
In Colorado,
we are a “title state”, meaning that title companies (which also issue the
title insurance policy for the transaction) officiate the closing process,
which is highly streamlined compared to other states.
Because
closing costs are often prorated to the sales price and/or loan amount, states
with higher real estate prices tend to have higher closing costs.
The bottom
line is that, even though it may seem like buying or selling a home in Colorado
is expensive, we are the third cheapest state in the country for closing
costs.
Which means
more of your money stays in your pocket.
