Buying a new home is an exciting and big decision, especially if you’re a first-time homebuyer. But before you dive too deep into furniture shopping, picking out new colors for your bathroom, or re-designing your backyard, be sure to budget for closing costs.
Closing costs are the fees and expenses associated with finalizing a real estate transaction and transferring ownership of a property from the seller to the buyer. Let’s break down how much closing costs are in Minnesota, who pays for them, and what costs you can expect to pay as a buyer and as a seller.
How much are closing costs in Minnesota?
In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Typically, closing costs in Minnesota can range anywhere from 2%-5% of the home’s purchase price. But it’s important to remember that this is just a range and the total amount will depend on a number of factors, such as the purchase price of the home, the type of loan, and any adjustments negotiated with the seller.
For example, if you’re buying a home in Rochester, which has a median sale price of $322,500, closing costs could range anywhere from $6,450 to $16,125. Or, let’s say that you’re buying a home in Minneapolis, which has a median sale price of $340,000. Closing costs for a home here could cost you anywhere between $6,800 and $17,000.
Who pays closing costs in Minnesota?
Generally, both buyers and sellers can expect to pay closing costs. But, each party’s closing costs amount will vary depending on what they are required to pay. Another thing to keep in mind is that buyers typically pay for closing costs out of pocket, while the seller’s closing cost payments are often deducted from the home sale proceeds.
Buyer closing costs in Minnesota
Closing costs in Minnesota for homebuyers typically range between 2%-5%. If you’ve paid earnest money, which is typically 1%-3% of the home’s price, this amount will be…