What Are the Closing Costs for Buyers in Georgia?

If you are budgeting to buy a home in Atlanta, the down payment is only part of the cash you need to plan for. Buyers also have closing costs—the collection of lender, legal, appraisal, title, prepaid and other expenses required to get from an accepted contract to the closing table.

There is no single percentage that is right for every Georgia buyer. Your loan type, purchase price, lender, insurance, taxes, timing of the closing and negotiated seller contributions can all change the final number. That is why we encourage buyers to build a real closing-cost estimate early instead of relying on a rule of thumb found online.

What typically makes up a buyer’s closing costs?

For a financed purchase, a large portion often comes from the loan itself. Depending on the financing, that can include lender origination or underwriting charges, credit-related fees, appraisal costs and prepaid interest. Discount points, if you choose to pay them to reduce your interest rate, can materially increase the amount due at closing. Then there are the costs connected to transferring and protecting ownership. In Georgia, real-estate closings are generally handled by a closing attorney. Your transaction may include attorney and settlement charges, title examination, title insurance and recording-related expenses. You should also plan for prepaid and escrow items. Homeowners insurance may need to be paid in advance. A lender may collect money to establish an escrow account for future taxes and insurance. The exact amount can change depending on when during the year you close.

Do not forget the inspection period

Some important buying expenses occur before closing and may not appear on the final settlement statement. A general home inspection, sewer or septic evaluation where appropriate, radon testing, termite inspection, structural evaluation or specialist inspection can add to your upfront costs. We view these less as “extra expenses” and more as information costs. Spending several hundred dollars to better understand a property can be a very good investment when you are considering a purchase worth hundreds of thousands—or millions—of dollars.

Can the seller pay some of the costs?

Sometimes. Seller-paid closing costs or concessions can be negotiated, subject to the contract, market conditions and limits imposed by the buyer’s loan program. But a concession is not automatically free money. The entire offer—including price, financing, contingencies and seller proceeds—needs to make sense.

The best question is not, “What percentage are closing costs?” It is, “What will my total cash requirement be for this particular purchase?”

Before making an offer, ask your lender and real-estate advisor to help you estimate your down payment, earnest money, due-diligence money if applicable, inspections, closing costs, prepaid expenses and reserves. Then update that estimate when you identify the actual property. Buying a home should not come with a surprise at the closing table. A good plan tells you what the home costs to buy—not simply what is printed on the listing.

Chatel Group | Atlanta Real Estate Answers
This article provides general real-estate information, not legal, tax or lending advice. Costs and contract practices can change. Confirm your specific figures with your lender and closing attorney before making a financial decision.