Closing Cost Surprises: What to Budget For - The Koch Garpstas Realty Group

You’ve found the perfect home, the offer’s accepted, and you’re ready to close—then the final costs hit, and suddenly your budget feels tighter than expected.

Many buyers focus so much on the down payment that they forget about closing costs—the additional fees and expenses that come with finalizing a real estate transaction.

Let’s break down what these really include (and how to avoid last-minute surprises).

What Are Closing Costs?

Closing costs are the collection of fees paid at the end of a home purchase to cover things like:

Lender fees (loan origination, underwriting, and application costs)
Title and escrow fees
Appraisal and home inspection fees
Prepaid taxes and insurance
Recording and transfer fees

They typically range between 2% and 5% of the purchase price, depending on your loan type and location.

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The Common “Gotcha” Costs

Even buyers who expect closing costs can be caught off guard by:

Prepaid expenses (you might have to prepay several months of taxes and insurance)
Private Mortgage Insurance (PMI) if your down payment is under 20%
HOA transfer fees or dues for properties in communities with associations
Title insurance to protect against ownership disputes or past liens

These aren’t hidden costs—but they’re often underestimated or overlooked during the excitement of the purchase.

How to Plan and Prepare

To avoid last-minute stress:

Ask your lender for a detailed Loan Estimate early in the process
Review the Closing Disclosure carefully a few days before settlement—it lists every fee
Keep a financial cushion of at least a few thousand dollars beyond your down payment
Lean on your agent to explain which costs are negotiable or typical in your area

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The Bottom Line

Closing costs are a normal part of buying a home—but they don’t have to catch you off guard.

Understanding what to expect (and budgeting accordingly) can help you close with confidence instead of surprise.

Buying soon?

A local real estate professional can help you navigate estimates, negotiate credits, and make sure you walk into closing fully prepared—no financial surprises included.