So, you want more details on closing costs, you’ve come to the right place! We’ve broken down typical closing costs by state, to give you a sense for how much you’ll really need to have in the bank to be able to fund that dream home of yours!
We’ve assumed certain types of costs vary by state, and certain costs don’t. For instance, most mortgage related costs, such as points, doc fees, and appraisals, are driven by the type of loan, specific lender, and cost of home, rather than geography. Our cost estimates assume 1% for points and underwriting fees, and $1,000 for appraisals and other doc fees. On a state by state level, and more specifically, county by county level, the main variances result from differences in title fees, tax rates, and local customs dictating which party is responsible for certain costs. For instance, in California, the party responsible for closing costs such as owners title policy and escrow differs by county, and is generally still negotiable case by case.
Here are the best and worst states with closing costs expressed as a percentage of a standardized $500,000 primary residence; so although California and Massachusetts may have some of the highest home prices in the US, their % closing costs are not as bad as states known for more affordable housing, such as Vermont and Pennsylvania.
Here are the highest and lowest closing costs by state:
Highest Closing Costs:
- Vermont – 4.38%
Vermont edges out Pennsylvania because of the high transfer taxes that are typically born by the buyer. These are calculated at 0.5% of the first $100,000 of property value, and 1.45% multiplied by the remaining portion of the value.
- Pennsylvania – 4.28%
Pennsylvania stands out for having among the highest title fees in the US, and it is not helped by its relatively high transfer taxes and above average property tax rate. Browse homes for sale in Pennsylvania here.
- New Jersey – 4.04%
New Jersey ranks 3rd on the list if the home sale price is greater than $1,000,000; for homes above this level, the state imposes a 1% supplemental fee paid by the buyer. For homes less than $1,000,000, NJ is still in the top 5 costly states as a result of relatively high title fees and property taxes.
- New Hampshire – 3.93%
New Hampshire has a higher overall transfer tax than #1 ranked Vermont, at 1.5%, but it is usually split between the buyer and seller, thus reducing the overall burden on the buyer. Title fees are on the low end of the range for the US, but property taxes are at the high end of the range.
- Florida – 3.64%
This is the only state in the top 5 that does not have buyer-paid transfer taxes. Instead, a Florida buyer has to contend with relatively high title fees and property taxes. In certain hurricane prone areas, insurance costs may drive these numbers even higher, making it one of the costliest states to buy a home in the US. Browse homes for sale in Florida here.
Lowest Closing Costs:
- New Mexico – 2.26%
Buyers can expect to pay little to nothing for title and escrow costs in this state, and can also expect low property taxes and insurance costs.
- Colorado – 2.30%
Some areas can impose high transfer taxes, but generally buyers can expect to avoid transfer taxes when buying a property here, and title fees and property taxes are some of the lowest in the US. Browse homes for sale in Colorado here.
- Arkansas – 2.41%
Slightly higher title fees and taxes than Colorado.
- Alabama – 2.43%
Ultralow property taxes are a highlight, but there is a small transfer tax a buyer can expect to pay here.
- Washington – 2.44%
Sellers chip in here to keep the buyer’s costs among the lowest in the US; that, combined with below average property taxes, puts Washington in the #5 spot; however, buyers face a hefty transfer tax when it becomes their turn to sell. Browse homes for sale in Washington here.
