6 min read Apr 06, 2024

How Much are Closing Costs for Buyers in South Dakota?

Home buyers are on cloud nine after buying their dream homes until they see the closing disclosure. It lists many additional expenses you have to bear as “closing costs.”

South Dakota home buyers spend $3,105 on average in closing. These are out-of-pocket expenses you need to finance, buy, and own your home. Buyer closing costs largely depend on the location and can add up to several thousand dollars in some areas of the Mount Rushmore State.

This hefty amount may startle first-time home buyers busy saving up for the down payment. As a rule of thumb, set aside 2% to 5% of the purchase price to cover the closing costs in South Dakota.

📌 Decoding Closing Costs in South Dakota

  • How Much are a Buyer’s Closing Costs in South Dakota: Typical closing costs for a buyer in South Dakota range between 2% to 5% of the purchase price.
  • What Do Buyer Closing Costs Include: Buyer closing costs consist of one-time expenses of loan origination, notary, recording, and appraisal. It also includes recurring expenses like property taxes and homeowner’s insurance.
  • How to Reduce Closing Expenses: You can ask for seller concessions, shop for lenders, or apply for closing cost assistance programs.

What are Closing Costs in South Dakota?

Closing costs are the fees you pay to acquire a mortgage and buy a home. There are three categories of buyer closing costs:

  1. Property Related Costs: These include the costs to inspect, appraise, and survey the property. Additionally, taxes such as property tax and transfer tax also fall in this category. 
  2. Paperwork Related Costs: These consist of real estate attorney fees, recording fees, notary fees, etc.
  3. Mortgage Application Costs: This includes the money you spend to finance your new home. Expenses like loan origination fees, application fees, processing fees, etc., come under this category.

For home buyers in South Dakota, closing costs are an out-of-pocket expenditure. You cover them using a cashier’s check or with a wire transfer.

Who Pays Closing Costs in South Dakota, Buyer or Seller?

In most South Dakota real estate transactions, buyers and sellers share the closing costs. But buyers cover most of them. You can negotiate with the seller for concessions.

Home sellers can offer concessions only up to a certain percentage of the sale value. The seller concessions limit varies per the loan type and is as follows:

Mortgage TypeDown PaymentSeller Concession Limit
ConventionalLess than 10%3%
Conventional10% to 25%6%
ConventionalMore than 25%9%
Conventional Mortgage for Investment PropertyAny amount 2%
FHAAny amount6%
VAAny amount 4%
USDAAny amount6%

» Who Pays Closing Costs in South Dakota: Learn Who Covers the Major Chunk of Closing Costs.

How Much are Closing Costs in South Dakota for Buyers?

Home buyers in the Mount Rushmore State can expect to pay 2% to 5% in closing costs. However, to estimate your closing costs more accurately, use the South Dakota buyer closing costs calculator below:

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How Much are Closing Costs on a Cash Deal in South Dakota?

Cash home buyers pay lower closing fees or settlement charges. South Dakota closing costs for cash buyers are around 1% of the purchase price.

Cash home sales don’t have a financing contingency. So, you skip mortgage closing costs as a cash buyer. Additionally, most cash buyers purchase homes as is which further helps them save on appraisal and inspection costs.

You can use the closing costs calculator for cash buyers in South Dakota to get an estimate of closing your expenses.

What is Included in Closing Costs for Buyers in South Dakota?

Here are some of the most common estimated closing costs for a buyer in South Dakota:

Loan Application FeeUp to $500
Loan Origination Fee0.5% to 1.5% of the mortgage value
Home Appraisal Fee$300 to $500
Real Estate Attorney$100 to $1100 per hour
Courier Fee$30 to $50
Credit Report Fee$10 to $100
Title Search Fee$100 to $500
Title Insurance Fee$7.06 per thousand
Discount Points1% of the mortgage value
Escrow FundsAt least 2 months of mortgage payments
Transfer Tax0.1% of the purchase price
Home Inspection Fee$200 to $400
Home Owners Insurance$2,500 per year
Recording Fee$120 to $150

Additional Buyer Closing Costs Per the Loan Type

You might have to bear additional buyer closing costs in South Dakota if you opt for a specific type of loan. These may include the following:

Private Mortgage Insurance (PMI)0.5% – 1% of your loan amount
FHA Mortgage Insurance Premiums1.75% of the loan amount
VA Funding Fee1.25% to 2.15% of the loan amount
USDA Guarantee Fee1% of the loan amount

How to Avoid Paying Closing Costs When Buying a House?

There is no way to waive home-buying closing costs completely. However, here are some tips that can bring down your South Dakota buyer closing cost estimates:

  • Ask for Seller Concessions: You can ask the seller to contribute to your closing costs through concessions or credits. However, the percentage of seller concession varies per the mortgage type.
  • Shop for Mortgage Lenders: Research mortgage lenders in South Dakota and compare their rates. Choose a lender that has a lower mortgage cost and offers competitive rates for the loan of your choice.
  • Research Closing Costs Assitance Programs: There are grants to assist buyers with government loan closing costs. Typically, local or state housing authorities or nonprofits offer these grants. Research the eligibility criteria for each type of grant before you apply.

Bottom Line

The closing cost percentage for buyers in South Dakota accounts for 2% to 5% of the total purchase price. The exact closing costs depend on the type of loan, home value, sale contingencies, and local laws.

You can ask for seller credits or concessions, negotiate with your lender, or opt for a no closing cost mortgage. You can also apply for state-sponsored closing costs assistance programs.

Ensure you account for the closing amount while you are busy saving up for the downpayment. Review the closing disclosure to know the exact closing estimates. Apart from funds, review and bring all the documents needed at closing.

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Frequently Asked Questions

1. How much are closing costs in South Dakota if you pay in cash?

Closing costs in South Dakota for cash buyers are around 1% of the purchase price. Cash home sales don't have a financing contingency. So, cash buyers skip mortgage-related closing costs. Additionally, most cash buyers purchase homes as is which further helps them save appraisal and inspection costs. You can use the closing costs calculator for cash buyers in South Dakota available online to get an estimate of closing your expenses.

2. Are closing costs in South Dakota high?

Average closing costs in South Dakota are 1.3% of the buying price. This is lower than the national average of 1.81%.

3. When are closing costs paid in South Dakota?

Closing costs are paid on the day of settlement when you transfer the funds and sign the paperwork for buying your house in South Dakota.

4. How can I lower my closing costs in South Dakota?

You can do the following to lower your closing costs in South Dakota:

1. Negotiate seller concessions
2. Opt for a no-closing cost mortgage
3. Apply for closing costs assistance programs

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