Common Buyer Expenses and Responsibilities

December 20, 2016




  1. Bank costs, including application fee, credit report, appraisal or inspection fee, processing fees and bank attorney fees.
  2. Attorney fee for representation of Buyer’s interests at passing of papers (ranges from $300 up.)
  3. Tax escrow to bank if bank is paying taxes.
  4. Adjustments payable to Seller for taxes, oil, water, sewer, rents (if terms were paid in advance by Seller).
  5. Fee for recording deed, mortgage and CML payable to the Registry of Deeds.
  6. Fee for Certificate of Municipal Liens payable to Tax Collector.
  7. Homeowner’s fire and liability insurance policy (sometimes must be prepaid for one year) depending on lender’s requirements.
  8. Prepaid interest (based on the contract rate of interest and day of month of closing).
  9. Private Mortgage Insurance premium (for Buyers with minimum down payment, if less than 20%).
  10. Mortgage Survey Plan (plot plan).
  11. Well tests are sometimes required by the bank


b.Quantity (5 gallons per minute for 4 hours)

  1. Home and Termite Inspection. (Paid outside of closing)
  2. Points (each point is 1% of the mortgage amount).
  3. Title Insurance.
  4. Declaration of Homestead
  5. Contact: electric, gas, water, oil companies to continue their services.

It’s important to note most of these expenses are considered part of a buyers closing cost and pre-paid items which are typically paid at the time of closing and generally referred to as “closing cost”.

This means the buyer will have to pay for these items in addition to their down payment and will be required as part of their “cash to close” in which the lending institution will typically verify the buyer has sufficient funds.  If a buyer is short on funds to cover closing cost, the buyer will often need to work out a deal with the seller to pay a portion of the closing cost.  This is typically negotiated as part of the initial offer.  For more information regarding seller paid close cost click here.