Who Pays Closing Costs in South Carolina?

Closing costs are the various fees and expenses incurred during a real estate transaction. Both buyers and sellers typically bear responsibility for different portions of these expenses, which are settled at closing. The specific allocation of these costs can vary, influenced by local customs and the terms negotiated within the sales contract.

Buyer’s Closing Costs in South Carolina

Buyers in South Carolina encounter closing costs primarily related to securing a mortgage and ensuring the property’s condition and clear title. Loan origination fees, charged by lenders for processing a new mortgage, are a common expense. Appraisal fees are also necessary, typically ranging from $500 to $700 in South Carolina, to determine the property’s market value for the lender. Credit report fees, usually a smaller charge, cover the cost of obtaining the buyer’s credit history.

Home inspection fees are highly recommended and typically cost between $275 and $500 in South Carolina, varying with property size and complexity. Lender’s title insurance protects the lender against title defects, and buyers generally cover this cost. Escrow fees are often collected for future property taxes and homeowner’s insurance premiums, ensuring these ongoing expenses are covered.

Recording fees are charged by the county to officially register the deed and mortgage, formalizing the transfer of ownership and the lien. Survey fees, if required, can range from $500 to $1,500 for a boundary survey in South Carolina. Attorney fees for closing services are a requirement in South Carolina, with costs that can vary depending on the transaction’s specifics. Additionally, buyers often prepay interest on their mortgage, along with initial premiums for property taxes and homeowner’s insurance.

Seller’s Closing Costs in South Carolina

Sellers in South Carolina also incur various closing costs, with real estate agent commissions often being the most substantial. The average total real estate commission rate in South Carolina is approximately 5.34% of the home’s sale price, typically split between the listing and buyer’s agents. While the seller is primarily responsible for their agent’s commission, they often offer to cover the buyer’s agent fee to facilitate the sale.

Owner’s title insurance, which protects the buyer from future title issues, is frequently paid by the seller in South Carolina. Transfer taxes, commonly known as deed stamps or excise tax, are levied on the sale and transfer of property. In South Carolina, this tax is $1.85 for every $500 of the property’s value and is typically paid by the seller.

Attorney fees for preparing the deed and other closing services are also a seller’s responsibility. Prorated property taxes represent the seller’s share of taxes up to the closing date. Any outstanding homeowner association (HOA) fees are also prorated. Finally, sellers must account for the payoff of their existing mortgage.

Negotiating Closing Costs

Many closing costs are subject to negotiation. Market conditions, such as a buyer’s or seller’s market, can influence who bears more of the costs. For instance, in a buyer’s market, sellers might agree to pay a portion of the buyer’s closing costs, known as seller concessions, to make the property more attractive and encourage a sale.

These concessions can also arise if issues are discovered during a home inspection, prompting the seller to offer credits to cover repairs or other buyer expenses. The ability to negotiate certain fees, such as real estate agent commissions, can also vary depending on the property’s price and the agents involved. It is important that any negotiated terms regarding closing costs are clearly documented and included within the purchase agreement to ensure all parties understand their financial obligations.

Estimating Your Closing Costs

For buyers, obtaining accurate estimates for closing costs is facilitated by specific documents provided by lenders. The Loan Estimate (LE) is a form lenders provide within three business days of a loan application, outlining estimated closing costs and loan terms. Three business days before closing, buyers receive the Closing Disclosure (CD), which provides a final breakdown of all loan terms and closing costs.

Sellers can obtain an estimate of their closing costs and net proceeds by consulting with their real estate agent or closing attorney. These professionals can prepare a “seller’s net sheet,” which details anticipated expenses and provides a projection of the funds the seller will receive from the sale. These documents provide estimates, and minor variations may occur. Engaging with real estate professionals and asking questions about all listed fees is a practical step.