Congratulations! You are in the final stretch! However, the joy of finalizing the real estate deal brings with it the stress of financial planning. Closing costs in Indiana are a sum of expenses you should plan for when buying or selling a house.
- Closing costs or “settlement costs” are a set of final expenses paid for completing a real estate transaction.
- The seller and the buyer both pay closing costs in Indiana.
- The 3 major Seller Closing Costs in Indiana are:
- 1. REALTOR Fee
- 2. Recording Fee
- 3. Escrow Fee
- The 3 major Buyer Closing Costs in Indiana are:
- 1. Loan Origination Fee
- 2. Escrow or Impound Account
- 3. Appraisal Fee
- In Indiana, real estate transactions are usually closed by title agents or attorneys.
What are Closing Costs in Indiana?
Closing costs in Indiana are a sum of fees that have to be paid to different stakeholders. Closing costs are essential for finalizing the real estate deal and transferring the ownership of the house. These settlement costs are paid in addition to the net property amount.
Who Pays Closing Costs in Indiana?
Both the buyer and seller pay certain closing costs at the end of the real estate transaction in Indiana.
The seller shells out a higher monetary amount as closing costs as they pay the REALTOR commission. Other fees, like documentation charges, transfer fees, etc., are paid by the buyer.
Some closing costs are negotiable, while others are non-negotiable, like taxes charged by your state or local jurisdiction.
Depending upon the market conditions, the buyer or the seller can negotiate their share of the closing costs. For example, in a buyer’s market, the seller may have to bear a portion of the buyer’s closing costs.
» Is the Housing Market Going to Crash in Indiana: We explain what the Indiana real estate market will be like in 2023.
Who Pays Closing Costs on FSBO in Indiana?
While For Sale By Owner (FSBO) property sellers do not have to pay heavy real estate agent commissions, they cannot completely escape closing costs. Some of these are:
1. Property Tax
The owner of the house has to pay property tax based in the value of the property to the local government. It can be paid annually or at the time of the real estate transaction. The seller must pay prorated property tax according to the date of purchase at closing. The average property tax in Indiana is 0.81%.
2. Seller’s Attorney Fees
The law in Indiana does not mandate the presence of an attorney for FSBO real estate transactions. However, it is highly advised to hire a real estate attorney for FSBO deals to avoid any type of legal risk.
A real estate attorney guides the owner in preparing the necessary documents like seller disclosure and drafts of other legal paperwork. Real estate attorneys in Indiana charge typically $275 per hour.
3. Pre-listing Appraisal
FSBO sellers may have to invest in the pre-listing appraisal, as it would help them find an appropriate buyer in less time. This will, in turn, lower the number of days on the market and make the sale faster. In Indiana, the cost of pre-listing appraisal ranges from $325-$400.
How Much are Closing Costs in Indiana?
The closing cost in Indiana for sellers is approximately 8%–10% of the home’s agreement value, while the buyers are expected to pay around 2%–5% of the home’s purchase price.
Let’s put this in perspective! The median home value in Indiana is $227,165. So, if you are selling a house in Indiana, you may have to pay $18,173- $22,716 as closing costs. On the other hand, if you are buying a house in Indiana, your closing costs may range between $4,543 to $11,358.
How Much are Closing Costs for Sellers in Indiana?
As mentioned above, when selling a house in Indiana, you will have to pay some closing costs to legally transfer the house ownership to the buyer. These costs include several fees that need to be paid over and above the net price of the property.
Some seller closing costs are negotiable. Real estate agents usually have information about who pays what at closing and can help you save on closing costs.
Here are some of the prime seller closing costs in Indiana.
1. REALTOR Fee
The seller pays real estate commissions to both the listing agent and the buyer’s agent. The average commission for real estate agent in Indiana usually amount to 5%-6% of the agreement value.
» How To Negotiate Real Estate Commission: Check out this blog to find out how to negotiate REALTOR commissions like a pro!
2. Recording Fee
The recording fee is paid by the seller to make the real estate transaction a matter of public record. In Indiana, the recording fee ranges from $600 to $700 across different counties.
3. Escrow Fee
An escrow agent is an unbiased third party who helps you and the buyer complete the transaction. They clear the house for sale, transfer the ownership to the buyer, and the respective funds to the seller.
The escrow fee is the remuneration charged by the escrow agent for their services.
4. Home Inspection Fee
Sellers can opt for an IN state inspection to identify any major defects and issues, like plumbing issues, water damage, mold, appliance malfunction, etc., in the house that they must resolve before selling.
This can be done before the property is listed on the market (pre-inspection) or just before the closing. The average home inspection cost in IN ranges from $400-$600.
The buyer can also undertake a home inspection. However, if the best home inspector Indiana finds undisclosed defects, it might give them the upper hand during negotiations, or they may back out of the deal.
» Typical Seller’s Closing Costs Indiana: Here is a detailed breakdown of closing costs to sell a home in Indiana.
How Much are Closing Costs for Buyers in Indiana?
These are the closing costs paid by the buyer while acquiring the property ownership from the seller. Like seller closing costs, these too are negotiable. Hence, hiring a buyer’s agent can help you save on closing costs.
We have listed some of the prime buyer closing costs.
1. Loan Origination Fees
Some mortgage lenders in IN charge buyers a loan origination fee to execute the loan with other respective documentation and legal formalities. The loan origination fee usually amounts to 1% of the mortgage loan amount.
2. Mortgage Escrow Account/ Impound Account
A part of the buyer’s monthly mortgage payments are reserved in an escrow or impound account by the mortgage lender. This reserve is maintained to pay the property tax and homeowners insurance premiums.
A mortgage servicer manages the mortgage escrow account and makes the payments on behalf of the buyer.
3. Appraisal Fee
Appraisal fees are paid to the professional appraiser who assesses the home value and ensures you get the best competitive price.
The cost for home appraisal in Indiana varies between $300 and $500, depending on the property characteristics like its actual saleable area and its geographical location.
4. Title Insurance
Title policy in Indiana is offered by a title company to protect the insurer against any type of loss with respect to any outstanding taxes, unpaid dues, default in the title, or any violations. The average owner’s title insurance cost in Indiana is around $200-$250.
» Typical Closing Costs for Buyer in Indiana: Here is a detailed breakdown of the customary buyer closing costs in IN.
5. Land Survey Fee
A land survey gives the buyer a better idea of the property they are buying in a legal and official capacity. The cost of a land survey in Indiana may start from $250 and go further depending on the size of the land.
» How Much Are Closing Costs for Buyer: Find out the details of ALL the closing costs in Indiana for buyers.
How are Closing Costs Calculated?
It is important to calculate closing costs while selling a house or buying one.
The estimated closing costs give sellers an idea about the home equity they will have after the sale and helps buyers find out the amount they will have to pay over and above the agreement value of the house.
» Closing Cost Calculator: Check out the closing costs calculator for calculating the closing costs for your real estate transaction.
How to Calculate Closing Costs for Seller?
Houzeo’s Home Sale Calculator helps calculate closing costs for sellers in Indiana with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission, and voila!
The Seller Closing Cost Calculator even gives sellers an estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.
» Seller Closing Cost Calculator Indiana: Check out the seller closing costs calculator for calculating the closing costs for seller.
How to Calculate Closing Costs for Buyer?
Houzeo’s Buyer Closing Cost Calculator helps calculate closing costs for buyers in Indiana. To find the estimated buyer closing costs, the buyers have to add the property location, home purchase price, and the down payment in the buyer closing cost estimator.
The closing cost calculator for buyer gives a detailed list of the buyer’s estimated closing costs.
Home buyers can find out everything right from origination fee, appraisal fee and survey fee to title search, attorney fee, recording fee, prepaid interest charges, escrow property taxes, and owner’s title insurance.
The Buyers Closing Cost Calculator even shows which fees have to be paid before closing and which ones have to be paid at closing while buy a house in Indiana.
» Indiana Buyer Closing Cost Calculator: Check out the closing costs calculator for buyer for calculating the closing costs for buyer.
Closing Costs in Indiana for Refinance
Before we dive into closing costs for refinance, let’s look at the term refinance:
What is Refinancing?
Refinance, also called “Refi,” is nothing but replacing your current loan with one that offers a lower rate of interest. This helps lower monthly mortgage payments.
How Much are Closing Costs in Indiana for Refinance?
Refinancing closing costs are the sum of several expenses paid against any services that were used in the process of underwriting and closing on your mortgage loan, which makes up 3%-5% of the mortgage amount.
The closing cost for refinancing would vary with respect to the property’s location. Overall, Indiana mortgage refi closing costs are the highest in the nation.
Junk Closing Costs to Watch Out For
Junk costs are the additional costs that are imposed by the mortgage lender. These are usually excessive but can be challenged and negotiated for a fairer price. Some of these are:
- Application Fee: The buyer pays this fee to the lender when applying for the mortgage. Not all lenders charge an application fee.
- Loan Processing Fee: This fee is charged by the lender to execute the loan once it has been approved. Borrowers can negotiate for these charges to be waived.
- Mortgage Rate Lock Fee: This fee is a guarantee that the lender will honor the pre-agreed interest rate for a said amount for a set period.
- Underwriting Fee: Mortgage underwriters charge underwriting fee to evaluate and verify loan applications. It is a non-recurring fee. Some lenders charge it in place of the originating fee, while others charge it in addition to the same.
- Courier Fee: A fee of $20-$50 is typically charged in order to cover the courier transactions.
Note: The costs vary by region.
The closing cost in Indiana is the mandatory fee that needs to be paid by the seller & the buyer. This is paid over and above the mortgage loan amount. Where the buyer pays 2%-5% and the seller pays 6%-10% against their share of the closing cost.
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Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs. It is the best company for flat fee listing Indiana.
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Frequently Asked Questions
1. How much are closing costs in Indiana?
The closing cost in Indiana for buyers is approximately 2%–5% of the home’s agreement value. While the sellers are expected to pay around 6–10% of the home’s purchase price, including realtor commission.
2. How much are closing costs in Indiana for buyer?
The buyer closing costs are the charges paid by the buyer while acquiring the property ownership from the seller. These charges included several fees that need to be paid over and above the agreement amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
3. How much are closing costs in Indiana for seller?
The seller closing costs are the charges paid by the seller while transferring the property ownership to the buyer. These charges included several fees that need to be paid over and above the agreed amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
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