Home inspections, earnest money, mover’s fees…the costs of buying a home in Pennsylvania can add up. While some fees are only a few hundred dollars, the final closing costs can run into the thousands. If you fail to factor them into your homebuying budget, you could walk out of closing with the keys to your new house and an emptier bank account than you’d planned on! Matt Durbin, a top agent in Western Pennsylvania with 14 years of experience helping homebuyers, says that “a lot of times people miscalculate what they’re going to need in total cash at closing to get a purchase done in our area, especially if they’re moving from another state.” Don’t get caught unaware; here’s what you need to know about closing costs in Pennsylvania. Closing costs are fees related to buying a house. They are due on the official date of purchase (also known as closing). Some of these costs, such as property taxes and insurance, are related to homeownership in general. Others, such as origination fees and interest, are directly related to obtaining a mortgage. Richie Helali, a licensed, senior mortgage advisor at HomeLight Home Loans, says that closing costs are most often paid through wire transfer or certified check, along with the down payment for the mortgage. A down payment is separate from your closing costs but is typically due at the same time. If the total amount of your closing costs plus your down payment is financially overwhelming, sometimes lenders will allow you to roll the closing costs into the total amount of your loan, thus lowering the amount of cash you have to bring to close. We’ll provide some example closing costs in a minute to illustrate how this all plays out. Finding out you’ll have to come up with funds over and above your down payment can be an unwelcome surprise, even if you did qualify for down payment assistance. The good news is that both buyers and sellers are responsible for certain fees and closing costs. Here’s who pays which closing costs. While the percentages above are typical, buyers and sellers can negotiate to determine who pays specific closing costs. If you have a motivated seller, or it’s a slow market, you can usually ask the seller to take on more of those costs. According to Durbin, “It is quite common in PA to ask for a percentage of closing costs to be covered out of the seller’s proceeds. It is applied to the buyer’s closing costs to reduce the out-of-pocket that the buyer will need to come up with.” While transfer taxes are usually split in Pennsylvania, Durbin says that you can ask the seller to cover them all. Many of your closing costs will depend on the size of the home you’re buying and the purchase price. Appraisers charge more to examine a 4,000-square-foot house than a 1,500-square-foot house. To give you a rough idea of a buyer’s closing costs in Pennsylvania, we based this table off the state’s median home price of $237,774 and 1,700 square feet. Pennsylvania doesn’t require an attorney’s presence at close for either buyers or sellers, which is a cost savings over other states. However, if you’re buying or selling a house by owner, it’s a good idea to hire an attorney to look over the paperwork.
Keep in mind, your final costs will vary based on the purchase price, how many points you pay on the mortgage, and property taxes. What if you’re the person selling that $237,774 house? Sellers are responsible for some closing costs of their own, such as the real estate commission and half the transfer taxes. And watch out for those transfer taxes! Durbin cautions buyers that “Normally they’re 2%, 1% goes to the state, and half goes to the county, and half goes to the locality,” but that “in the city of Pittsburgh their transfer taxes are 5%, it’s an additional 3% to purchase in the city of Pittsburgh.” If you’re paying close attention to all your costs, check the state and local transfer taxes with your Realtor. Example estimate based on a $237,774 median-priced Pennsylvania home. Average property taxes are estimated at 1.5% and assumed six months of ownership. Pennsylvania home prices can vary widely depending on the area. To estimate closing costs, you’ll need to know the price range you’re shopping in and the typical taxes for the city. Buyers in Pennsylvania generally pay closing costs that range from 2% to 5% of the home’s price. This table provides examples of closing costs for homes priced from $175,000 to $350,000. If you’re looking for an estimate of closing costs on a potential new home, you can get a rough or preliminary estimate by using free online tools such as HomeLight’s Closing Costs Calculator. Other handy tools from HomeLight include our Home Affordability Calculator and Down Payment Calculator, which help buyers look at the total picture of home buying and ownership. However, the best way to determine what your closing costs will be in Pennsylvania is to partner with a top real estate agent or mortgage advisor. According to ClosingCorp’s latest Purchase Mortgage Closing Cost Report, closing costs in Pennsylvania rank as the sixth highest in the nation at an average of $10,634. Here are some ways buyers and sellers might be able to minimize closing costs: For home-purchase peace of mind, team up with a savvy Pennsylvania real estate agent who is well-informed about local market conditions; they’ll know what’s “normal” for the city and county you’re buying in and where sellers might bend. Ask about a closing cost credit to reimburse some of those closing costs that you can’t legally shift to the seller. HomeLight can connect you with some of the most experienced buyer’s agents in Pennsylvania. Simply answer a few questions, and our Agent Match platform will analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. Want to know more? Here are some quick answers to common questions about closing costs in Pennsylvania. Most closing costs are paid on the date of closing. However, some (such as inspection fees or application fees) con sometimes be paid upfront, depending upon the scenario. Closing costs are typically paid by wire transfer. Not all of your closing costs can be rolled into your financing. Homebuyers pay the home inspector up front, and your lender requires you to pay any loan application and appraisal fees before the mortgage closes. Whether or not you can roll the remainder of the closing costs into the loan depends on your lender and the terms of your mortgage product. Dye testing requirements are a closing cost unique to Pennsylvania. They often surprise out-of-state buyers. “Because our rivers and our tributaries are connected to the Chesapeake Bay, they need to do dye testing to make sure the storm and sewer water is going where it’s supposed to be going,” Durbin explains, adding that the inspections — which can include sewer camera testing — can be expensive. If the dye-testing reveals that repairs are needed, it can run thousands of dollars and are often a deal killer in Western Pennsylvania. Private mortgage insurance (PMI) is typically required when you obtain a conventional mortgage and make a down payment that’s less than 20% of the home’s purchase price. A conventional mortgage is any mortgage that’s not part of a government loan program. This means FHA and VA loans are not conventional mortgages, as they are insured by government programs. They might, particularly if you work with their in-house lender. Ask your agent if there are any local builders offering concessions. Pennsylvania is known for having some of the highest closing costs in the nation. But many consider those costs worth the satisfaction of becoming a homeowner and having the chance to build equity! Working with a great agent, you can find a house that’s in your budget for the down payment, mortgage, and closing costs. Ready to find your match? Partner with a trusted buyer’s agent in Pennsylvania who can help guide you through closing cost expectations ahead of time. A top agent will know the market and have a proven track record of helping buyers find and close on their new Pennsylvania home. Header Image Source: (Pierre Blaché / Pixabay)What are closing costs?
Who pays for closing costs in Pennsylvania?
How much are closing costs in Pennsylvania?
Buyer closing costs in Pennsylvania
Closing cost item
Typical cost to buyer
Appraisal fee
$325-$400
Loan origination fees
$2,378
Credit report
$40
Home inspection
$300
Wood Destroying Organism inspection (Lender may require)
$90
Dye-testing requirements
$175
Survey fees (Lender may require)
$1,050
Recording fees
$650
Prepaid points
$2,378
Title insurance
$1,000
Escrow (property taxes and insurance)
$3,567
Attorney fees
Not required in PA
Typical buyer closing cost total
$12,028 (5.06%)
Seller closing costs in Pennsylvania
Closing cost item
Typical cost to seller
Real estate commission (average 5.53%)
$13,149
Transfer taxes (or documentary stamp)
$2,378
Title search fee
$200
Attorney fees – not required in PA, 1 hour
$250
Property taxes (pro-rated for months you owned the home)
$1,783
Wire transfer fees
$30
Concessions (transfer taxes are common)
$4,755
Outstanding amounts (electric, gas, sewer)
$536
Typical seller closing cost total
$23,081 (9.7%)
How can I estimate my closing costs in Pennsylvania?
Home price
2% closing costs
3% closing costs
4% closing costs
5% closing costs
$175,000
$3,500
$5,250
$7,000
$8,750
$200,000
$4,000
$6,000
$8,000
$10,000
$225,000
$4,500
$6,750
$9,000
$11,250
$250,000
$5,000
$7,500
$10,000
$12,500
$275,000
$5,500
$8,250
$11,000
$13,750
$300,000
$6,000
$9,000
$12,000
$15,000
$325,000
$6,500
$9,750
$13,000
$16,250
$350,000
$7,000
$10,500
$14,000
$17,500
How can I lower my closing costs in Pennsylvania?
How can I find a top real estate agent in Pennsylvania?
Additional expert insights about closing costs in Pennsylvania
When are closing costs paid in Pennsylvania?
Can I add closing costs to my home financing?
What are dye-testing requirements in Pennsylvania?
Will I need to pay private mortgage insurance (PMI) in Pennsylvania?
Will a builder pay closing costs on a new construction home in Pennsylvania?
Conclusion: Know your closing costs in Pennsylvania
