Whether specific closing costs are paid by buyers or sellers depends on the customs in each specific location of Ohio. Also, closing costs are negotiable.
The Loanfully research team has surveyed over 1,000 real estate professionals to find out which closing costs are most commonly paid by buyers and which ones — by sellers.
Let’s see who pays what in closing costs in Ohio.
Buyer Closing Costs in Ohio
The Loanfully research team surveyed over 1000 real estate professionals to find out what fees Ohio buyers pay in closing costs.
Below is a graph showing the summary of the experts’ answers about the charges they usually see included in their buyer clients’ closing costs:
Ohio buyers generally pay 1-6% of the purchase price in closing fees and charges.
The average closing costs in Ohio for home buyers are itemized on the Closing Disclosure (CD) statement.
Under federal law, the CD must be reviewed with the buyer at least three days before the transaction’s final closing.
The buyer’s Closing Disclosure typically includes the following costs.
Taxes and Fees
The lender will ask buyers to deposit one-twelfth of the monthly property tax bill into escrow before the closing.
Ohio property tax rate averages 1.43% of the assessed value of the home, so the buyer will need to pay one-twelfth of that amount.
Recording fees vary with the county, but buyers should expect to pay a minimum of $34 for the first two pages of the document, and $8 for every additional page.
If the new home is part of a homeowners’ association, there may be an initial membership, and a fee for the month or year (prorated to your purchase date), in addition to an HOA insurance premium fee
Lender Charges
Ohio lenders are required under the federal Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) to review all of the lender costs and fees the buyer will pay during the time the mortgage is held.
Buyers pay various lender fees and also a property appraisal charge. A mortgage agreement may also require a parcel survey.
Most Ohio buyers will need to make a down payment when using a mortgage. A first-time home buyer may receive a first-time home buyer grant in Ohio that covers the down in full, or reduces the amount to less than 10% of the sale price.
Buyers who put less than 20% on the purchase, will see additional fees for private mortgage insurance (PMI). Some loans have a set PMI fee to close and then additional fees each month.
Annual PMI fees range from approximately 0.5-1.5% of the original loan amount.
Inspections
It’s typically the buyer’s responsibility to hire and pay for any professional home inspections.
Inspection costs vary with the type of service, size of the home, and age of the property.
The average Ohio home inspector will charge between $350-700. Radon monitoring can add $100-300 to that amount.
Title
The lender requires a title search. This fee is between $100-300, depending on the complexity of the property research done.
Buyers are required to purchase title insurance to protect against any unrecorded liens. Usual costs for the lender and owner’s insurance policies total 0.05-1.0% of the final sale price.
Hazard Insurance
The lender requires a hazard insurance policy. This cost varies with the property, type of coverage selected, and the buyer’s credit history.
Hazard insurance policies are arranged during escrow, and the company will require payment, or a partial payment, of the bi- or annual policy fees, at that time.
Buyers may also have the option of setting up a separate escrow account that will collect a monthly amount to pay the annual hazard insurance on the date it’s due.
Certain lenders require this account. Others will allow buyers to make their own payments on or before the policy due date.
Escrow Fees
Buyers pay fees for the independent escrow firm that creates the legal sale paperwork and organizes the transaction.
That fee can run between 1-2% of the sale price, but this price varies with the escrow company.
Brokerage Fees
In Ohio, all real estate brokerage fees are typically paid by the seller. Sellers, however, may ask the buyer to cover the buyer’s agent commission or fees in some cases.
That places the buyer in the position of paying an average commission of 3% of the final sale price to the brokerage.
Attorney Fees
A real estate attorney isn’t required to close a transaction in Ohio, but the buyer may hire one to advise or to review the purchase contract, manage the loan monies and sale paperwork, or to supervise the signing of the final closing documents.
Hourly legal fees in Ohio range from $100-500.
Seller Closing Costs in Ohio
Charges most commonly included in seller closing costs in Ohio, according to our survey of experts.
The rule of thumb for home sellers in the Buckeye State is to plan on paying 6-10% of the sales price in closing costs.
That figure for the seller’s average closing costs in Ohio includes agent commissions.
Agent Commissions
Real estate commissions are the main share of the professional fees for sellers. Six percent is the typical fee when using a real estate brokerage in Ohio.
That fee is divided between the seller’s and buyer’s agents. Generally, half the commission is paid to each brokerage. The agents are then paid according to their contracts with their brokers.
Attorney Fees
A real estate attorney can be hired, but that service isn’t required under Ohio laws. Hourly fees for an attorney in Ohio range from $150-500.
A flat fee to handle the review of closing documents runs from $1,300 to $3,000. The price for a lawyer is based on the type of legal closing services the buyer requests.
Escrow Fees
Escrow coordinates all the legal paperwork needed to sell a house in the Buckeye State.
Escrow fees vary with the type of work done in the sale and the sales price, but use 1-2% of the final sales price to estimate escrow services.
Transfer Fees
Transfer fees vary with the Ohio locality. Each village, city, or county sets unique charges. These are typically calculated by using a percentage of the final transaction sales price, and are generally 0.01% of the final sales price.
Property Taxes
Property taxes will be prorated during escrow. Sellers pay property taxes on the home until the day the deed is transferred.
Calculate the fees by dividing your property taxes by 365 days. If the taxes are prepaid beyond the close of escrow, the seller will receive a refund in that amount after the transaction closes.
Insurance
Insurance carriers use a percentage of the final sales price to calculate title insurance fees. That’s generally 0.05-1.0% of the property sales price for a policy.
Pricing factors in the location of the home and the type of coverage requested. Sellers will make the title insurance payment in one lump sum as part of the closing costs.
The hazard insurance premium will also be prorated by using the closing date. When the current payment doesn’t cover the escrow time period, the policy will be prorated, and the seller will pay any outstanding amount at the close of escrow.
If the coverage is paid beyond the closing date, a refund of that amount will be made by the insurance carrier.
Payoffs
Sellers will pay off any mortgages on the home as part of the final closing. The lender generally charges a fee to calculate the final loan payoff amount.
Any other liens using the property as collateral will also need to be paid. These will be billed in escrow after the title search, and are typically paid with the proceeds from the property sale.
Negotiable Closing Costs
Some of the closing costs can be negotiated. Let’s see which ones.
Negotiated Seller Costs
Ohio real estate commissions are negotiable. The typical rate in Ohio is 6%, and that’s normally divided between the buyer’s and seller’s real estate brokerage, but both parties can negotiate commissions.
Buyers may also ask sellers to pay specific costs or fees. Common requests include paying the buyer’s closing costs.
The seller might offer a cash credit for home repairs identified but left unrepaired before putting the home on the market.
The buyer may find other necessary repairs, or a home inspection might flag problems that require further negotiations with the seller.
Some buyers will ask the seller to place the cost of these repairs in an escrow fund for use after the closing. Others might request a reduction in the asking price of the home by the amount of the repairs.
Negotiated Buyer Costs
Buyers can request anything from the seller during the contract stage, but they run the risk of alienating a seller when a number of small requests for minor items are made.
The major negotiation between buyer and seller usually happens over the final sale price, the amount required to open escrow, and the time needed to close the transaction.
Time is money when selling a house, and the seller may demand a higher purchase price when the buyer requests a long escrow period.
Sellers and buyers frequently negotiate over the cost of the title and title insurance policies.
Negotiated Lender Costs
Buyers have a host of costs and fees associated with a mortgage. These generally include a loan origination fee and an application charge.
Lenders typically require borrowers to pay for a credit report when applying for a mortgage. Fees also usually list a charge for lender underwriting and loan processing.
Not all lenders have the same charges and fee schedules. Some will bill for small services unrelated to the actual mortgage itself. These are known in the industry as “junk fees.”
These fees can be negotiated during your initial loan discussions and during the final review of your loan paperwork while in escrow.
Next Step
Now that you know what your closing costs will include and how you could possibly avoid some of them, you can shop for loans.
Get a free consultation by filling out the form to get pre-approved for a mortgage!
