Closing Costs Breakdown for Buyer and Seller in Oregon

Who pays for what in Oregon between home buyer and seller and how much? (350K home)

BUYER Average Costs SELLER Average Costs
Preliminary Costs
Earnest Money Deposit / Down Payment to Escrow  Varies (as low as $2,500) Home Preparation (painting, staging, storage, photography, minor repairs, and etc)  Varies
Credit Report $50 Keep Homeowner’s Insurance Until Deed Transfer $50 / mo
Loan Application / Processing Fee $0 – 500
Home Inspection $200-450
Home Appraisal (Lender Picks Vendor) $300-600
Homeowner’s Insurance (w/ hazard protection) $50 / mo (Apply before closing)
Home Survey if Lender Requests One $500-1,000 (Rarely needed)
Pay / Settle At Closing
Loan Origination Fee (Varies Among Lenders) 1% of loan amt or as low as $0. (Sliding Scale b/w origination and rates: Can be included in the loan for higher interest rates)  Owner’s Policy of Title Insurance Around $1,200 for 300K Loan
 Lender Required Title Insurance $300-600  Agent Commission Typically 5-6% split b/w listing & buying side
 50% of Escrow Fee $500-800  Prorated Property Taxes / HOA Fees Up To the Closing Date  Varies
 Discount Points if Any (Each pt reduces 1%) $1,000 for every $100K for 1%  HOA Transfer Fees Varies (Depends on the HOA on who pays)
 Recording (Varies by County) $46 – $250  50% of Escrow Fee  $300-500
 Notary Public Varies  Home Warranty if Applicable $350 – $500 / yr
 Seller Pre-paid Property Tax  Varies  Pro-rated Property Tax / Utility / HOA  Varies
Property Transfer Tax Washington County only. $1 per every $1,000 typically shared by buyer and seller Property Transfer Tax Washington County only. $1 per every $1,000 typically shared by buyer and seller
HOA Transfer Fees Varies (Depends on the HOA on who pays) Reconveyance Tracking (Varies by County) Around $120 per Recorded Trust Deed Payoff
Government Service Fee (Varies by County) Around $30 per Lot

Home buying and selling can be a costly process.  Many people jump into their dream of home buying or selling without realizing all the costs involved in the process.  Often real estate agents do not properly inform first time home buyers and sellers of all the involved costs.  For consumers, having to find out these later in the process after signing the contract can be frustrating.

So the question is who pays for what for closing costs including all the hidden fees and miscellaneous fees when buying or selling a home in Oregon?  Each state is a little different both legally and customarily in terms of who pays for what costs.  Here in Oregon, the chart above lists all the important costs involved in the process of real estate transactions and the breakdown of who pays for what and how much in general.

Normally, higher the home price, higher the fees will be for both buyers and sellers.  It is important to note that even though sellers pay for the biggest cost, which is the agent commission fee to be split between listing agent and buyer agent, buyers still pay closing costs of anywhere between 2 – 4% of the sale price.  A big portion of the costs comes from closing / settlement fee including loan origination fees, which can be included in the loan if the buyer chooses for higher interest rates.  Some lenders charge a low flat fee for this amount but then you will that their other charges are higher.  If you’re buying a home for 300K, expect to have at least $6,000 in addition to your down payment for all the costs.  For cash buyers, you can remove all the costs related to lending above.

Some buyers do not have enough cash upfront other than the down payment to cover the enormous costs of buying a home.  In cases like that, buyer’s agent can try to arrange a deal with a listing agent to include the closing costs in the mortgage amount.  That arrangement may not work if the house is priced high and the lender will not appraise the value of home to be worth extra $5,000-$10,000 closing costs.  So there are some risks involved in transactions like that but some buyers have no choice.  As a consequence, sellers often reject such offers in the seller’s market with multiple offers because the offer adds an extra layer of risk.  The offer will include a price higher than the seller’s asking price to cover the closing costs.  If the buyer’s lender does not appraise the value to that extent, the deal can fall apart.  In some cases, though, this works if the seller accepts the offer and crafty real estate agents can make it happen.

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Peter Park

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