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How to avoid hidden costs when you buy a home

Written by
Jenny Rose Spaudo


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Key takeaways

  • Buyer closing costs are typically around 2–5% of the home’s purchase price.

  • Some closing costs may be negotiable.

  • Avoiding big purchases can help the loan approval process stay on track.

  • Walking through the home before closing can help you avoid unpleasant surprises.

You just made a winning offer on a home you love. What’s next? Here’s what you need to know about closing costs plus five steps to help ensure a smooth closing.

Closing costs and the closing process

Once the seller accepts your bid, the closing process begins and usually lasts on average about 54 days if you’re purchasing with a mortgage. Before the closing date, a lender will typically require that the home be appraised and inspected. You may also want to go over any final contract negotiations, and make sure the seller gets any necessary repairs done. During this time, your lender will also finalize your loan. 

At closing, you’ll pay certain fees to the lender that cover administrative tasks, taxes, and outside services.

Buyers typically pay 2–5% of the home’s purchase price in closing costs. But the exact amount depends on where you live and the cost of your new home. Some of the most common buyer closing costs may be:

  • Application and credit check

  • Loan origination

  • Attorney fees

  • Notary fees

  • Loan points

  • Mortgage insurance and application

  • Home inspection

  • Home appraisal

  • Property taxes (for the portion of the year that you own the home)

  • HOA transfer

  • Title search

  • Title insurance

  • Land survey

  • Recording

  • Transfer tax

Of course, costs and fees will vary from sale to sale. Some of these closing costs may be negotiable depending on a variety of factors. Your real estate agent can help you determine whether to negotiate and which costs to ask the seller to cover.

How to ensure a smooth closing

Not everything may go according to plan during the closing process, but don’t let that discourage you. There are several steps you can take to work toward a smooth closing.

1. Gather your documentation

To finalize your loan, your lender will need certain documents, including things like bank statements, W-2s, tax returns, investment account statements, or any gift letters. If you’re recently married or divorced, make sure all your documents have your updated legal name.

2. Look over the estimated closing costs 

During the loan approval process, your lender will give you an estimate of your mortgage payments and closing costs. Look over this document carefully and save a little extra in case closing costs are higher than expected.

3. Avoid big purchases or new debts

Purchasing expensive items like a car can delay the loan approval process. So can taking on new debts, opening a new credit card, or changing jobs. It may help to wait until after the closing date to do these things.

4. Do a final walkthrough a few days before closing

Walk through the house before closing to make sure the seller has completed any agreed-upon repairs. Also check if the seller has removed all their belongings, windows and doors are locked, and appliances are in working order.

5. Call your lender the day before closing

You don’t want your closing to be postponed because your lender forgot to get important information from you. Contact your lender either the day before or the day of your closing to make sure they have everything they need. 

This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.

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