What are closing costs?

Closing costs refer to the fees and expenses that buyers and sellers incur during the finalization of a real estate transaction, beyond just the purchase price of the home. These costs can include a variety of items such as loan origination fees, title insurance, inspection fees, and attorney fees, among others. They are necessary for completing the sale and ensuring that all legal and financial obligations are met.

Understanding closing costs is crucial for both buyers and sellers because they can significantly impact the total expenses of the transaction. Each real estate transaction can have different closing costs depending on the location, the specifics of the deal, and the requirements of the lenders and local governing bodies.

The other options do not correctly define closing costs. For instance, costs associated with maintaining a property after purchase are ongoing expenses and unrelated to the transaction's conclusion. Costs tied to the realtor's commission are only a part of the larger closing costs and do not encompass all the fees involved. Lastly, while some costs may be relatively consistent, closing costs can vary widely depending on various factors of each transaction, thus they are not fixed or pre-defined universally.