How Much Are Closing Costs in GA?

By: ROS Team

Buying a home in Georgia is an exciting step, but understanding the financial aspects is crucial. One key cost to consider is closing costs – those fees that pop up at the very end of the transaction.

This guide will break down everything you need to know about closing costs in Georgia, from average amounts to specific fees, helping you navigate this step smoothly and ensure a successful home purchase!

What Are Closing Costs?

Before delving into the specific closing costs in Georgia, it’s essential to understand the fundamental concept of closing costs in real estate transactions.

Closing costs are additional expenses, beyond the purchase price, that both buyers and sellers incur when finalizing a real estate deal. These fees encompass various services, including mortgage origination, appraisals, title insurance, taxes, and escrow management.

How Much are Closing Costs in GA?

The average closing costs in GA depend on the value of the home you’re purchasing but generally fall within a range of 1.3% to 5% of the total price. This can equate to approximately $1,897 for a lower-cost mortgage or around $16,199 for a home at the median price point.

According to data from Zillow, the typical home price in Georgia currently stands at $327,174. Therefore, the average closing costs in GA would amount to roughly 1.3% of that figure, or $4,253.

Factors That Will Affect Closing Costs GA

Here are the factors that will affect your closing costs in GA:

1- Loan Lender

Different lenders have diverse fee structures. The closing expenses they require can vary substantially. Shopping around and obtaining quotes from multiple lenders is crucial to secure the most competitive rates.

2- Property Location

Where the property is situated plays a significant role. Third-party service providers like appraisers and surveyors often charge varying rates based on the area. Government fees and taxes will also fluctuate depending on the location.

3- Loan Type

The type of home loan you choose affects your closing costs. For instance, FHA loans frequently require upfront mortgage insurance premiums added to closing expenses, while conventional loans may not require this payment.

Who Pays Closing Costs in Georgia, Buyers or Sellers?

In Georgia, closing costs are split between buyers and sellers. Traditionally, each party covers their own set of typical costs, though there can be some negotiation.

Closing Costs for Buyers in Georgia

Closing costs in Georgia for buyers typically range from 2% to 5% of the purchase price. Here’s a breakdown of some common fees you can expect to pay:

Loan Origination Fees: This covers the lender’s processing and underwriting costs. They typically range from 0.5% to 1% of the loan amount in Georgia.

Appraisal Fees: An appraiser determines the property’s market value to ensure it meets the loan amount. In Georgia, appraisal fees usually cost between $350 and $500.

Lender’s Title Insurance: This protects the lender in case of any ownership claims or title defects on the property. The average cost for lender’s title insurance in Georgia is around $550.

Prepaid Expenses: You’ll prepay property taxes and homeowner’s insurance for the period after closing until your first bill arrives. The exact cost depends on the property tax rate and your homeowner’s insurance premium.

Recording Fees: This covers the cost of registering the deed transfer with the local government. Fees vary by county.

Attorney Fees (if used): An optional cost for legal representation during closing.

Closing Costs for Sellers in Georgia

Selling a home in Georgia involves some closing costs on your end as well. These typically range from 5% to 10% of the selling price.

Here’s a breakdown of some common seller closing costs:

Real Estate Agent Commission: This is often the biggest expense. It’s usually 5-6% of the sale price, split between the seller’s agent and the buyer’s agent (if applicable). For Georgia’s median home value of $327,174, this could range from $16,358 to $19,630.

Transfer Taxes: The state of Georgia imposes a real estate transfer tax of 0.1% of the sales price.

Owner’s Title Insurance: This protects you from ownership claims after the sale. In Georgia, it averages around $830.

Recording Fees: These fees cover the expenses to register the deed transfer with the local government, around $25 in Georgia.

Attorney Fees (if used): An optional cost for legal representation during closing.

HOA Transfer Fees (if applicable): These are fees charged by the homeowners association for transferring membership to the new owner. Costs can vary but typically range from $200 to $500.

Prorated Property Taxes: You’ll reimburse the buyer for any property taxes you’ve already paid for the portion of the year after closing.

Municipal Lien Search: This $100 to $300 fee covers checking for outstanding liens on the property.

Why Are Sellers’ Closing Costs Higher Than Buyers’ in Georgia?

In Georgia, sellers often face higher closing expenses compared to buyers. The primary reason lies in realtor commissions, which constitute a substantial portion of the sale price. Though buyers incur various fees, these costs aren’t directly tied to facilitating the property sale itself.

How Can I Lower My Closing Costs in Georgia?

Here are some strategies to potentially reduce your closing costs in Georgia:

Negotiate: Negotiation holds the key for both buyers and sellers. Sellers may discuss lowering their realtor’s commission, potentially saving a substantial sum on a typical Georgia property. Meanwhile, buyers can negotiate with the seller to cover a portion of the closing costs as part of the deal.

Seller Assistance Programs: Georgia offers assistance programs for first-time homebuyers, which could provide grants or credits to help offset closing costs. These programs can be a valuable resource for eligible individuals.

Shop Around: Obtaining loan estimates from multiple lenders is crucial. Compare the rates and fees to identify the most competitive option.

Choose the Right Loan: Different loan programs have varying upfront costs. For instance, FHA loans may have higher mortgage insurance premiums. Carefully evaluate your options to strike a balance between interest rates and closing costs.

Consider a No-Closing-Cost Mortgage: No-closing-cost mortgages bundle these expenses into the interest rate, potentially lowering upfront costs. However, this option often results in higher long-term expenses. Weigh the pros and cons carefully before making a decision.

When Do Closing Costs Need to Be Paid?

Closing costs are typically paid at the closing itself, which is why they’re called closing costs. This final meeting finalizes the real estate transaction and grants ownership to the buyer.

Closing Costs On New Construction
How Can Sellers Upset Closing Costs