What closing costs are
and what shows up on the list

Closing costs are the fees and expenses paid at settlement, over and above what you agreed to pay for the house. They are not the down payment, and that is the distinction buyers get caught by. The down payment is your money going into the property. Closing costs are what it takes to get the loan written, the title cleared and the sale recorded. Added together, the two are what you have to have at the table. For buyers in New Jersey, closing costs often run somewhere around 2 to 4 percent of the loan amount, though the real number moves with the loan, the price and the town.

On a buyer's side, the list breaks into a few groups. There are the lender's own charges for writing the loan, along with the appraisal and the credit work. There is title insurance and the title search behind it, which is the work of confirming the seller can actually convey what they are selling. There are recording and transfer charges for putting the deed and the mortgage on the public record. And there is prepaid escrow, which is property taxes and homeowners insurance collected ahead so the escrow account starts with a balance in it. That last group is worth understanding as money moved forward rather than a fee, since you would be paying it either way.

Sellers have their own list. New Jersey charges a realty transfer fee on the sale, calculated on the price and paid by the seller at settlement. The commissions set out in the listing agreement are settled there as well. In New Jersey commissions are negotiable. A seller may also be paying off an existing mortgage and covering their own settlement charges, which is why a seller's net is a separate calculation from a buyer's cash to close.

The figure gets real in two documents. Early on, your lender gives you a Loan Estimate, which is the first honest look at the range. Then, before closing, comes the Closing Disclosure, a five page statement of the final loan terms and the cash to close that the lender sends at least three business days ahead of the closing date. Reading the second one against the first, line by line, is one of the more useful hours in the whole transaction. If the two disagree in a way you did not expect, that is a question to ask before you sit down, not after.

What to ask, and who answers it. Your lender is the one who can tell you what your fees actually are, what the escrow will be set at, and what could still move between the estimate and the disclosure. A licensed New Jersey attorney is who reads your contract and tells you what it says about who pays for what in your own deal. Your agent can tell you how these numbers run in a given town, and whether a seller concession is a reasonable thing to raise in your situation. Nothing on this page is a quote for a specific transaction.