How Much are Closing Costs in Vermont?

Congratulations! You’re only a few more steps away from closing on your new home in Vermont. As you near the end of your homebuying journey, it’s crucial to account for closing costs. These fees, which cover things like title searches and local recording fees, can be significant. To avoid any financial surprises, you’ll want to make sure to set aside funds for these expenses and wait to make major purchases until you’ve officially closed and received the keys to your new home. Below we’ll break down how much closing costs are in Vermont, who pays for them, and what costs you can expect to pay as a buyer and as a seller.

How much are closing costs in Vermont?

Before securing the keys to your new home, homebuyers will need to pay for closing costs. As a general rule of thumb, you can expect closing costs in Vermont to add up between 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on numerous factors, such as the buyer’s loan program or negotiations made with the seller.

Let’s say you’re buying a home in Middlebury, where the median home sale price is $450,000. Based on this, you could expect closing costs to be between $9,000 and $22,500 . Whereas if you’re buying a home in Burlington, which has a median sale price of $465,750, closing costs could be anywhere from $9,315 to $23,288.

Who pays closing costs in Vermont?

Generally, both buyers and sellers can expect to pay closing costs. But, each party’s closing costs amount will vary depending on what they are required to pay. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are deducted from the home sale proceeds.

Buyer closing costs in Vermont

For homebuyers in Vermont, you can expect to pay between 2%-5% of the home’s purchase price. In most cases, you’ll pay earnest money, typically 1% to 3% of the home price, upon reaching mutual acceptance in your home purchase. This deposit is subtracted from your closing costs, reducing the total amount due at closing. Below are some of the common closing costs paid for by the buyer:

• Appraisal fee: Your mortgage lender will require a home appraisal to ensure the home value is equal to or more than the loan amount. Home appraisals typically cost between $300 and $500, depending on location. If you pay at the time of service, it will not be included in your closing costs.
  
• Inspection fee: Although not required, a home inspection is highly recommended. Home inspections generally range from $300 to $500 in cost and are usually paid at the time of service. However, if not, it will need to be paid at closing.
  
• Loan origination fee: Some lenders charge a fee for creating your loan. As you shop around for lenders, inquire about what it covers and whether it’s negotiable to avoid high fees.
  
• Loan processing fee: Lenders may also charge a loan processing fee, covering underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible waivers.
  
• Loan discount points: If you’ve purchased points to lower your interest rate, you’ll usually pay a one-time fee at closing. Each point can lower your rate by 0.25% to 0.5%. Consider your long-term plans, such as how long you plan to own the home or if you plan to re-finance, before purchasing points.
  
• Private mortgage insurance (PMI): Required for down payments under 20%, PMI might involve an upfront fee at closing, depending on the loan type. It’s usually part of your monthly payment, but some loans offer the option to pay it as a one-time fee.
  
• Title insurance: Title insurance is a one-time closing cost, with buyers commonly paying for both lender and owner policies.
  
• Homeowners insurance: In Vermont, your annual homeowner’s insurance premium may be part of your closing costs.
  
• Homeowners Association dues: For homes in HOA-managed communities, you might have to pay one month’s dues at closing, which can vary depending on the property and covers maintenance and operational expenses.
  
• Property taxes: Buyers may have to prepay property taxes as part of their closing costs in Vermont.

Seller closing costs in Vermont

How much closing costs are in Vermont for sellers will vary between each transaction, but below are some of the common fees and costs that a seller pays for:

• Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with their agent.
  
• Homeowners Association fees: If the property is part of a homeowners association, sellers are usually responsible for settling any outstanding HOA fees or assessments up to the date of closing. Additionally, sellers may need to provide certain HOA documents to the buyer as part of the sale.
  
• Property taxes: Any outstanding property taxes will be due at this time. However, if the seller has prepaid property taxes for the period that extends beyond the closing date, they may be credited back for the portion they’ve paid but won’t use.
  
• Title insurance: As part of closing costs for sellers in Vermont, sellers may pay for owner’s title insurance. Typically, this cost is based on the property’s sale price.

Median home sale price data from the Redfin Data Center during July 2024.