Closing Costs

The fees and expenses paid at the closing of a real estate transaction, typically 2-5% of the purchase price. Includes loan origination fees, title insurance, appraisal, attorney fees, and prepaid expenses.

Key Points

Understanding closing costs is essential for evaluating real estate investments
This concept helps investors compare opportunities objectively
Our Free Snapshot tool automatically calculates relevant metrics for any property

Related Terms

Down Payment

The initial equity payment made when purchasing a property, typically expressed as a percentage of the purchase price. Investment properties usually require 20-25% down payment, compared to 3-20% for primary residences.

Title Insurance

Insurance that protects against financial loss from defects in title to real property. Title issues could include unknown liens, fraud, errors in public records, or undisclosed heirs claiming ownership.