What are "closing costs"?

Closing costs refer to the various fees and expenses that are incurred when finalizing a real estate transaction. These costs typically cover a range of services necessary to complete the sale, such as title searches, title insurance, attorney fees, escrow fees, and other regulatory compliance costs. Understanding closing costs is crucial for both buyers and sellers as these expenses can add a significant amount to the overall cost of purchasing or selling a property.

Maintaining a property, while important in the overall context of ownership, does not relate to the transaction process itself and therefore isn't classified as a closing cost. Property appraisals, while often a part of the closing process, represent a specific service rather than encompassing the broader category of costs involved at closing. Similarly, charges for property insurance are ongoing expenses associated with ownership, rather than one-time fees associated with concluding a sale.