Many buyers spend months budgeting for their down payment, only to be caught off guard by another major expense, closing costs. These costs often show up near the end of the homebuying process, just when you think you’re ready to wrap up the deal. From lender fees to title services and last-minute charges, closing costs can add thousands of dollars to your total out-of-pocket expenses.

Understanding what to expect, what’s negotiable, and where hidden fees might surface can help you avoid financial surprises. Here’s what every homebuyer should know before heading to the closing table.

What are closing costs?

Closing costs are the collection of fees due at the end of your real estate transaction. This is when the home officially becomes yours. Many of these fees are related to your mortgage, such as loan origination, processing, and underwriting, but others cover services like the appraisal, legal paperwork, and title insurance.

What you pay will vary depending on the type of loan, the location of the home, and the negotiated terms of your purchase.

How much are closing costs?

In most cases, closing costs range from 2% to 7% of the home’s purchase price. On a $449,000 home (the national median), that equals roughly $8,980 to $31,430. These costs are in addition to your down payment, which is typically 10% to 20% of the home’s price.

Together, you could need between $53,880 and $121,230 in liquid funds to complete your home purchase.

What’s included in closing costs?

There’s a long list of line items that can show up in your closing disclosure. While not every buyer will pay every fee, many of these are common:

Typical buyer closing costs:

• Application fee
• Appraisal
• Attorney fees
• Buyer’s agent commission (rare but possible)
• Credit report fee
• Escrow services
• Home inspection
• Loan origination
• Prepaid property taxes and homeowners insurance
• Recording fee
• Title search and title insurance
• Underwriting fee

Typical seller closing costs:

• Attorney fees
• Outstanding mortgage payoff
• Prorated property taxes
• Listing agent commission
• Buyer concessions
• Transfer taxes

Are closing costs tax-deductible?

Not all closing costs can be deducted, but a few key items may reduce your tax bill. Mortgage interest, discount points, and property taxes may qualify as deductions if you itemize. These can lead to meaningful savings, especially in the early years of your mortgage when interest payments are highest.

Speak with a qualified tax professional to see what deductions apply in your situation.

What hidden or surprise fees should I prepare for?

Even when buyers review the loan estimate closely, some fees are not disclosed until just days before closing. These often fall outside your lender’s control and might include:

• Building-related fees
• Rush processing fees
• Move-in or move-out deposits
• Document preparation charges
• Management fees for HOA onboarding
• Co-op board application or flip taxes

According to William London of Kimura London & White LLP, while federal disclosure laws require accuracy in initial estimates, buyers may still encounter nonlender-related fees that go unnoticed until closing. “A strong real estate attorney can catch these charges early, push for full disclosures, or negotiate them down,” he explains.

Special considerations for condos, co-ops, and HOAs

Buying a home within a shared community often comes with added closing costs. In co-ops, you might face board application fees or flip taxes. Condos and townhomes may require HOA transfer fees or document handling charges. While some of these are refundable deposits, they can still tie up your cash.

Always ask for a full list of community-related closing fees upfront so you can budget accordingly.

What if you can’t afford closing costs?

If you’re stretching your budget already, there are several ways to reduce your out-of-pocket expenses:

• Seller concessions: Ask the seller to cover some or all of your closing costs as part of the purchase agreement.
• Lender credits: Some lenders offer “no closing cost” loans, where they cover the fees in exchange for a slightly higher interest rate.
• Assistance programs: First-time buyers may qualify for down payment or closing cost assistance through local or state programs. These can come in the form of grants or forgivable loans.

Each option has trade-offs, so speak with your lender and real estate agent to determine which approach fits your financial goals.

How to avoid closing day surprises

The best way to protect yourself from sticker shock is to stay proactive:

• Ask for detailed fee estimates early in the process.
• Request a preliminary closing disclosure well before closing day.
• Review your final documents with a trusted real estate attorney.
• Build in a financial cushion to absorb any last-minute adjustments.

John Zinati of Zinati Kay Barristers & Solicitors says, “Having a skilled attorney on your side helps resolve disputes over surprise charges, clarify responsibilities for final costs, and avoid delays at the closing table.” Without legal support, buyers may feel forced to accept unexpected fees to keep the deal from falling apart.

Final thoughts

Closing costs are a major part of buying a home, often overlooked until the last minute. By asking questions, reading every estimate carefully, and surrounding yourself with the right professionals, you can avoid being blindsided by hidden fees.

Frequently Asked Questions

Q: What are closing costs in a home purchase?
A: Closing costs are the collection of fees and charges paid at the end of a real estate transaction. These include expenses related to your mortgage, legal filings, title services, and other transaction-related tasks that finalize the purchase of your home.

Q: How much should I expect to pay in closing costs?
A: Closing costs typically range from 2% to 7% of the home’s purchase price. On a $449,000 home, this could mean paying between $8,980 and $31,430 in addition to your down payment.

Q: What’s included in closing costs for buyers?
A: Common buyer costs include the loan origination fee, credit report, appraisal, home inspection, title insurance, escrow fees, attorney fees, prepaid property taxes, and homeowners insurance.

Q: Are closing costs the same for buyers and sellers?
A: No. Buyers and sellers have different responsibilities. Sellers often pay listing agent commissions, transfer taxes, and may offer concessions, while buyers cover loan-related and title costs.

Q: Are any closing costs tax-deductible?
A: While most closing costs are not deductible, mortgage interest, discount points, and property taxes may qualify. Consult a tax professional to find out what applies to your situation.

Q: What are hidden or unexpected closing fees?
A: Hidden fees can include HOA transfer charges, move-in deposits, document preparation costs, and rush fees. Some may not be disclosed until just before closing, so reviewing your documents carefully is critical.

Q: How can I avoid surprise charges at closing?
A: Ask your lender and agent for a complete breakdown of all estimated costs early in the process. Work with a real estate attorney to review your final disclosure and flag any questionable fees.

Q: Do condos, co-ops, or HOA communities have extra closing fees?
A: Yes. These properties often include additional charges such as board application fees, flip taxes, and HOA transfer or move-in fees. These can add hundreds or even thousands to your final total.

Q: What if I can’t afford the closing costs?
A: You may be able to negotiate seller concessions, explore lender credits, or apply for local or state assistance programs designed for first-time buyers. Your lender or agent can help you evaluate the best approach.

Q: What’s the best way to prepare for closing costs?
A: Get a full cost estimate in writing, ask detailed questions, and set aside extra funds in case final totals come in higher. Having a real estate attorney review the documents can protect you from overpaying or missing hidden fees.

If you’re buying a home in San Antonio and want to prepare for a smooth closing with no surprises, reach out to Tami Price, Realtor. With years of experience navigating local closings, Tami can help you anticipate costs, ask the right questions, and stay fully informed from contract to close.