What do the term "closing costs" include?

The term "closing costs" refers to the various fees and expenses incurred during the closing of a real estate transaction. This typically includes a wide range of costs such as title insurance, appraisal fees, attorney fees, inspection costs, loan origination fees, and recording fees, among others. These costs can be essential for completing the purchase or sale of the property and are necessary to ensure that all legal and financial obligations are met.

In many transactions, both buyers and sellers can have specific closing costs to pay. Understanding that closing costs encompass a collection of expenses rather than just a single fee is critical for any party involved in a real estate deal, as it impacts the overall financial planning and budget for the transaction. This comprehensive definition highlights the significance of being informed about all potential costs associated with finalizing a property deal.