Closing Costs in Arizona, Who Pays What?

closing costs arizonaClosing costs in Arizona can be a bit confusing for both buyers and sellers, especially if it is their first time through the process. Closing costs can vary depending on your loan terms, and there are some fees that are negotiable or can even be waived in some circumstances. It pays to use an experienced agent that can walk you through all of the closing fees that you will see on the HUD-1 Settlement Statement. Some closing costs begin at the moment your contract is accepted, so take a few moments to consult with your agent on what to expect. Here is a summary of some fees that will comprise your closing costs when you purchase a home in Arizona:

Pre-Closing (inspection period):

Home Inspection Fee: varies depending on several factors including size of home, location, and if there are other amenities requiring inspection. Generally you will see a fee between $250-$500.

Termite Inspection Fee: typically will run between $50-$100 and depends on size and location of property.

Post Inspection (assuming buyer is moving forward):

Appraisal Fee: appraisals can run between $300-$500 on average, and are generally priced similarly to the manner of home inspections; size and location of the home.

Moving on through Escrow…so who pays what?

The Purchase Contract will govern who is responsible for paying closing fees, but here’s a quick guideline showing which party generally pays each fee on the HUD-1 Settlement Statement:

In Arizona the Buyer will typically be responsible for:

Any notary fees ($25-$100)
Any doc prep fees ($25-$100)
Half of the escrow fee ($300-$600 dependent on purchase price)
The lenders title policy (Based upon a $160k loan amount expect around $700)
Recording fees for buyer’s documents ($25-$50)
HOA transfer fee (can go either way, HOA Addendum will spell out who pays) ($200-$400)
Interest on new mortgage from closing date to first payment date (varies)
Homeowner’s Insurance policy premium for first year ($300-$600, dependent on home replacement cost)
Home Warranty (if contract states buyer pays)($300-$500)
Any other prepaid items (varies)

In Arizona the Seller will typically be responsible for:

Other half of escrow fee ($300-$600 dependent on purchase price)
Owner’s title insurance policy (Based upon a $200k sales price, expect around $1000)
Commission to real estate agent(s) (varies, dependent on listing agent’s contract with Seller. Typically seller pays commission to listing broker who then pays a portion to the buyer’s broker)
Any loan fees (closing costs credits) if included in contract (varies, generally 1%-3% if applicable)
Payoff of any mortgages or liens and any interest attached (varies)
HOA transfer fee (can go either way, HOA Addendum will spell out who pays) ($200-$400)
Seller recording fees ($25-$100)
Pro-rated property taxes and any delinquencies (varies)
HOA delinquencies (varies)
Home Warranty (if contract states Seller pays) ($300-$500)

These numbers are approximate figures and can vary, but should give a good benchmark for what closing costs to expect when buying or selling a home in Arizona.