21.6 Closing Cost Itemization: Case Illustration

This case study shows how closing costs and prorations can be calculated and allocated between buyer and seller.
The Closing Disclosure summarizes the financial settlement, and the closing agent may also provide a separate statement
detailing receipts and disbursements from escrow accounts.

Selling terms (what the parties agreed to)

• Sale price: $450,000
• Earnest money/deposit: $70,000
• Loan amount: $380,000 (30-year fixed at 5.5%)
• Closing date/time/location: May 10 at 4 p.m. at Alta Title Company (non-leap year)

Seller-paid costs (examples from the case)

• Commission: 6% of sale price
• Real estate taxes: $2,572 to be prorated
• Title insurance (owner’s coverage): $900
• Attorney: $1,500
• Survey: $550
• Transfer stamps: state $162, county $162
• Loan payoff: $184,000 plus prorated interest for 10 days in May

Buyer-paid costs (examples from the case)

• Appraisal: $400 (already paid)
• Credit report: $50 (already paid)
• Closing fee: $350
• Recording fees: $55
• Title insurance (lender’s coverage): $250
• Attorney: $1,200
• Pest inspection: $100
• Loan fees: 1.5 points + 1% origination fee
• Escrows: 8 months taxes + 4 months hazard insurance
• Prepaid interest: from day after closing through end of month

Sample calculations (from the case)