Buying- Closing Costs Explained

Closing costs are the costs associated with the purchase or sale of a home. There are closing costs for both the buyer and the seller. In general, closing costs in the Twin Cities Metro Area of Minnesota are about 3% on the buyers side, and 1% on the sellers side in addition to the commission. Here's how they break down:

Buyers' Closing Costs

Loan Charges

Loan Origination - Most lenders charge between 0.5% to 1% of the mortgage amount
Appraisal Fee - the cost of the appraisal, usually about $500-550
Credit Report - the fee for your credit report
Flood Certification - Checking if the property is in a flood zone, about $10
Discount Points - The buyer can buy down the interest rate by paying discount points at closing.


Initial Interest on the loan - from date of closing through the end of month (calculated as dollars per day times number of days). This amount depends on what day of the month we close. If the closing is towards the end of the month, the amount is lower.
Homeowners Insurance - Upfront 1 year of premiums, could be in the range of $1000 to $2000

Escrow Setup

Homeowners Insurance - 3 months of insurance as a deposit into the escrow fund, 1/4 of the amount above
Property Taxes - 6 months of taxes as a deposit into the escrow fund, 1/2 of the annual property taxes

Title Charges

Lenders Title Insurance Premium - Lender required title insurance, about $300
Owners Title Insurance Premium - (optional, but recommended) insurance to protect your title interests, depends on the price of the home, but around $750
Title Services - title search, background check, etc., depends on mortgage amount, in the range of $500-750
Closing Fee - Title company fee, usually about $300-500

Government Fees

Recording Charges - about $100 for recording the documents
Transfer Taxes - taxes for mortgage registration


Property Taxes - Property taxes prorated to the day of closing. This will be a credit on the buyer side and a debit on the sellers side if the seller owes the buyer some dollars, and vice versa, a debit to the buyer and a credit to the seller if the buyer owes the seller.

Broker Admin Fee

Broker Admin Fee -  RE/MAX charges a broker fee of $499. This goes to the broker for admin purposes, and is a normal part of the closing costs. Most brokerages charge an admin fee between $450 to $600.

There are few other miscellaneous fees as well.

Contact   Info

Drop us a message. Ask us a question. Contact us.


7700 France Ave S #230
Edina, MN 55435
(952) 915-2252 (direct office)
(952) 884-8404 (office front desk)

Steven Hong, REALTOR
Team lead
Old Home Certified
(612) 990-9009

Each office independently owned and operated.  All information is deemed reliable but not guaranteed, and should be independently reviewed and verified. Equal opportunity housing. 

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