# Closing costs for land purchase?



## mldrenen (Nov 29, 2007)

I don't know if any of you remember my thread a few weeks back about making an offer on some land. Well, they accepted my offer, and we're closing in two weeks.

I just found out yesterday that closing costs are going to be somewhere around $2300, plus $400 for an appraisal. All for what I thought was a simple transaction for less than $40,000.

Does this sound reasonable? Too expensive? To be honest, it's about $1000 more than I was anticipating.


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## Micahn (Nov 19, 2005)

We are going threw the same deal right now. We also will be having a mortgage for $40,000 after our down payment, but our closing cost is running about $5,000. It was higher that I figured it would be I guess that is just how it is now days. Ours does have a small home on it and some out buildings that have to be inspected and all so maybe that added to cost. I should get a detailed list today of what all the cost are. The good thing about it is that it appraised for $10,000 more then we are paying for it.


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## cfabe (Feb 27, 2005)

Get a breakdown of the costs, most ofthem are negotiable. It does sound a little high to me, where I've done transactions the closing costs have been 3-4% of the purchase price, but that is on a 100k+ house sale. So maybe a little higher percentage on a 40k transaction, if some of the costs are fixed costs.


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## rambler (Jan 20, 2004)

Bought 40 acres for $100,000 a few years ago, lawyer was about $840 split almost 50-50 between us. What is the rest of the money going for, $3-5,000? That's a chunk.

--->Paul


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## pcdreams (Sep 13, 2003)

mldrenen said:


> I don't know if any of you remember my thread a few weeks back about making an offer on some land. Well, they accepted my offer, and we're closing in two weeks.
> 
> I just found out yesterday that closing costs are going to be somewhere around $2300, plus $400 for an appraisal. All for what I thought was a simple transaction for less than $40,000.
> 
> Does this sound reasonable? Too expensive? To be honest, it's about $1000 more than I was anticipating.



sounds about right. we bought some land in VT a few years back and I think it was around 3-4 k total.. that includes prorated taxes, attorney fees, title search, etc.


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## mldrenen (Nov 29, 2007)

I am financing a small portion of the purchase, so the lender has a few fees thrown in there.

Fee breakdown, per good faith estimate:

$296 - loan origination fee
$410 - appraisal
$18 - credit report
$225 - underwriting charge
$79 - tax service charge
$350 - document prep fee
$600 - attorney's fee
$34 - title insurance
$25 - courier/wire charge
$51 - commission paid to attorney as agent
$300 - recording fee
$225 - survey/plot plan fee
$8 - flood certificate
$90 - mlc (no idea what that is?)

I know for certain that attorney's fees, recording fee, title insurance, and flood cert are non-negotiable. but the rest seem to be nickel and dime fees by the lender. Also, the appraisal seems a bit high for vacant land, and the land has already been surveyed, so I'm not sure why that's on there.

I'm going to make some phone calls this morning and try to get a handle on what I am being charged, and why.


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## Mallow (Aug 4, 2006)

Well looking over that I think the appraisal fee is high for raw land. You can also check the recording fees with the courthouse to see how much the actual cost is. I would say the total is definitely on the high side but I am used to WV where things are generally a bit simpler.


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## tiffnzacsmom (Jan 26, 2006)

MLC is taxes I believe, they have to order something from the town/county certifying that the taxes are paid and what will have to be paid at closing. The total looks about right to me but when I worked in the mortgage industry I was in the title end and didn't do much with actual closing costs.


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## cowcreekgeeks (Mar 5, 2009)

Closing costs are negotiable. We had the seller pay all the closing costs. It's all in how you make the offer. Are you using a real estate agent?


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## willow_girl (Dec 7, 2002)

Loan origination, underwriting and attorney's fees all are (or should be) negotiable. I don't know what MLC is, either, so I can't comment on that. I'd question the appraisal fee, too. Ask if the bank will accept an appraisal from another licensed, local appraiser, and if so, shop around! 

I don't see any title insurance fee in there. You are obtaining title insurance, right?!


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## goatlady (May 31, 2002)

There IS a $34 fee for title insurance, but I would question that recording fee for $300!!! most usually the county registerer of deeds charges $2 or $3 per page to record and all you are having recorded is a mortgage which usually runs less the $30! I also do not understand why an attorney is involved if you are getting a bank loan - the banks have standard forms they use nation wide and an attorney's "opinion" is really not necessary. IF the attorney was acting as agent for the seller I can understand the $51 agents fee but NOT that $600 fee - what the heck is that for?


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## TurnerHill (Jun 8, 2009)

That attorney fee, as mentioned, is high. In my area, that recording fee would not be high.

That document prep fee is also high, a bit.

The appraisal is a little high. I generally pay about $350.

I'd say you're on the high side of average, but there is nothing actually absurd there.


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## tiffnzacsmom (Jan 26, 2006)

Attorney's must review a title report in MA, as in NC and in WV, though West Virginia's laws do add a bit more lee way than the other states. Fees vary by area to get a better picture ask your neighbor's what their closing costs were like.


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## ET1 SS (Oct 22, 2005)

mldrenen said:


> ...
> 
> $296 - loan origination fee
> $410 - appraisal
> ...


Hmm, I bought undeveloped land in Maine.

I paid $200 flat fee to the land-transaction lawyer.

He charged me an extra $20 for title insurance and $5 recording fee.


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## TurnerHill (Jun 8, 2009)

ET1 SS said:


> Hmm, I bought undeveloped land in Maine.
> 
> I paid $200 flat fee to the land-transaction lawyer.
> 
> He charged me an extra $20 for title insurance and $5 recording fee.


Most of the charges the OP lists are from the lender. Did you have a loan?


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## switchman62 (Oct 19, 2007)

I just started the mortgage process on a property yesterday. I haven't seen the break-down yet but, my banker says it will be about $1200 for the closing costs. I know the appraisal is $350 because I had to pay for that yesterday (he said that is included in the $1200). The seller is paying for the survey because he is cutting this out of a much bigger chunk. 

I imagine it just varies alot from one state to another.

Dave


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## ET1 SS (Oct 22, 2005)

TurnerHill said:


> Most of the charges the OP lists are from the lender. Did you have a loan?


No.

The lawyer charges 'more' because a loan is involved?

Why should having a loan change the fees for: title insurance and the county recording fee?


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## edcopp (Oct 9, 2004)

Most of what people call closing costs are "fluff" for somebody's pocket.

Closing costs=

Preparation of a deed. The seller can do this himself for no cost, if he knows how. 

Deliver deed to the buyer, and get the money from the buyer. that's it. Done deal.

Everything else is "FLUFF". :cool


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## ET1 SS (Oct 22, 2005)

edcopp said:


> Most of what people call closing costs are "fluff" for somebody's pocket.
> 
> Closing costs=
> 
> ...


I agree.

When I bought this place, the seller offered to do the deed himself and he would have paid the recording fee with the county.

I did not trust him. So I desired to pay more.

I hired a lawyer who did the deed, recorded it, and who got the title insurance. The lawyer then charged me his standard fee, plus the fees for both the filing and the insurance.

You are entirely correct, in that the rest of the 'closing fees' are fluff.


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## eam (Jun 5, 2002)

MLC is probably Municipal Lien Certificate.


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## unioncreek (Jun 18, 2002)

We bought a commercial building in the town closest to where we live and plan on opening a restaurant. We paid $25K cash for the building, a lawyer friend took care of the closing for half price and it still come up to $2500.

Bob


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## fordy (Sep 13, 2003)

mldrenen said:


> I don't know if any of you remember my thread a few weeks back about making an offer on some land. Well, they accepted my offer, and we're closing in two weeks.
> 
> I just found out yesterday that closing costs are going to be somewhere around $2300, plus $400 for an appraisal. All for what I thought was a simple transaction for less than $40,000.
> 
> Does this sound reasonable? Too expensive? To be honest, it's about $1000 more than I was anticipating.


...........Make sure the title ins. covers the full value of your purchase , it appears that it only covers the amount financed . I say that because it is only $34 , but I could be wrong . , fordy:cowboy:


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## whinnyninny (Aug 17, 2005)

goatlady said:


> There IS a $34 fee for title insurance


That cheap? Here in TX, title insurance for the house I'm selling ($154.9K) is going to be $1,136!! (Luckily I am selling it as an assumption, so title insurance and the assumption fee of $500 are the ONLY closing costs, besides the $250 fee the title insurance company will charge to handle the closing). 

Your closing costs sound about right otherwise, I bought a house for $79K this past winter and the closing costs were in the neighborhood of $4,000.


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## Shadow (Jan 11, 2006)

About right based on our experience Small amounts closing total usually about 8 to 10 percent over 200k usually 5 to 6 percent is what we always planned if less we were happy more we would ask questions. paying cash made them lower, loans added to them. cash cut them aprox one half. David


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## NorthCountryWd (Oct 17, 2008)

I'm an appraiser and raw land or improved lot reports are more expensive than a single family detached. They start at $450 and go up with excess land.

Just wondering if it's a loan on just the land or on land and construction of a house. Very few lenders I work with will lend on raw land. 

As of May 1st, the lender has to order an appraisal thru a management company (who have their hands in the jar). No one with a vested interest in the property can order an appraisal for mortgage lending unless it's for FHA and then the lender can order. The homeowner cannot.


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