When a home is sold, there is a point in the transaction known as the closing, when the title to the property is transferred to the new owner. The buyer and/or seller commonly Closing costs can be substantialincur miscellaneous fees, which are collectively known as closing costs. These fees can be significant, averaging approximately 2% to 4% of the purchase price, although they may be as much as 8%.
Take a look at the following guide to get a better idea of what buyers and sellers are expected to pay upon closing:
  • inspection fees. Lenders may require a termite inspection or an analysis of the structural condition of the property in order to assure that a home will be reliable collateral to secure against a loan. An inspection of the septic system and water supply tests may also be required in rural areas. Always be sure to hire an InterNACHI inspector to get the most out of an inspection.
  • points. This one-time, prepaid interest is paid by the buyer to the lender as a way to reduce the rate of interest on the mortgage loan. One point equals 1% of the loan’s principal. For example, one point on a $200,000 loan is $2,000. If the borrower plans to live in the home for a long time, it might be to his advantage to negotiate for more points. Points can be financed by adding them to the loan, or they may be paid upfront and deducted from the current year’s income taxes.
  • title search fees. This one-time fee is used by buyers and lenders to make sure that the seller legally owns the property, and that the property has no outstanding liens or restrictions for use of which the buyer is unaware. If divorces, contested wills or court judgments are discovered during the title search, future complications can be avoided. Anyone may perform a title search, but borrowers commonly hire an attorney or title company to perform a thorough search.
  • title insurance. Title insurance policies are purchased to protect the lender against an error in the results of the title search, which would otherwise endanger the lender’s investment in the borrower’s mortgage. In case the title is challenged in court, title insurance will reimburse the insured up to a predetermined dollar amount.
  • appraisal fees. Lenders want to be assured that the property to be purchased is worth at least as much as the amount of the loan. An appraisal, performed by a licensed professional appraiser, will determine the fair market value of the property. The requirement of an appraisal may be waived if one has been performed recently.
  • recording fees. These are paid to the clerk and recorder’s office of the county where the property is located for the service of entering an official record of the change of a property’s ownership.
  • application fee. This cost covers the assessment of the buyer’s credit report and the initial processing fee of the mortgage loan. The cost is several hundred dollars.
  • loan origination fee. This umbrella charge covers the evaluation and preparation of the loan, which may include fees charged by the lender’s attorney or notary. The total cost can be several thousand dollars, although it can be reduced somewhat by a larger down payment.
  • prepaid interest. While the new homeowner’s first mortgage payment may not be due for some time after closing, interest starts accruing immediately after closing. For instance, if the deal closes on October 11th, the homeowner will owe interest for the 20 days preceding the first mortgage payment.
  • prepaid property insurance. Lenders typically require that the first year’s premiums of property insurance be paid in advance.
  • property survey fee. A survey is performed of the lot and its structures to confirm the deed’s legal description of the property,  including the property’s dimensions, and to check for encroachments, and verify that the house and other structures are where the seller says they are.
  • homeowners association (HOA) dues. If the property is part of an HOA, the buyer will need to cover, in advance, the requisite fees for the part of the remaining year that they will own the property.
  • property taxes. Like HOA fees, buyers must pay upfront the share of the property taxes for which they are proportionally responsible.

Tips for Reducing Closing Costs

  • Home buyers short on cash can roll the closing costs into the mortgage loan. It is also possible for the lender to pay the closing costs in exchange for a higher interest rate.
  • Choose a closing date that’s near the end of the month, as this will save money on prepaid interest.
  • Negotiate with the seller of the property to help pay for some of the closing costs.
In summary, closing costs include a variety of miscellaneous fees paid by the home buyer and/or seller.
Reference: Nick Gromicko & Internachi
Parker Home Inspections
Proudly serving the St Robert, Waynesville, Dixon, Rolla
St James, Cuba, Sullivan areas

Many people don’t know how easy it is to make their homes run on less energy, and here at Parker Home Inspections, we want to change that.

Drastic reductions in heating, cooling and electricity costs can be accomplished through very simple changes, most of which homeowners can do themselves. Of course, for homeowners who want to take advantage of the most up-to-date knowledge and systems in home energy efficiency, InterNACHI® energy auditors can perform in-depth testing to find the best energy solutions for your home.

Why make your home more energy-efficient? Here are a few good reasons:

  • It saves you money. It costs less to power a home that has been updated to be more energy-efficient.
  • It increases the comfort level indoors.
  • It reduces pollution. Conventional power production introduces pollutants that find their way into the air, soil, and water supplies.
  • It reduces our impact on climate change. Most scientists agree that excessive fossil fuel consumption contributes significantly to global warming.
  • Federal, state, utility, and local jurisdictions’ financial incentives – such as tax breaks, rebates, and component swaps – are available to many homeowners around the U.S.

1. Find better ways to heat and cool your house. 

As much as half of the energy used in homes goes toward heating and cooling. The following are a few ways that energy bills can be reduced through adjustments to the heating and cooling systems:

  • Install a ceiling fan. Ceiling fans can be used in place of air conditioners, which require a large amount of energy.
  • Periodically replace air filters in air conditioners and heaters.
  • Set thermostats to an appropriate temperature. They should be turned down at night and when no one is home. In most homes, about 2% of the heating bill will be saved for each degree that the thermostat is lowered for at least eight hours each day. Turning down the thermostat from 75° F to 70° F, for example, saves about 10% on heating costs.
  • Install a programmable thermostat. A programmable thermostat saves money by allowing heating and cooling appliances to be automatically turned down during times that no one is home and at night. Programmable thermostats contain no mercury and, in some climate zones, can save up to $150 per year in energy costs.
  • Install a wood stove or a pellet stove. These are more efficient sources of heat than furnaces.
  • At night, draw curtains over windows to better insulate the room.

Man is Adjusting a temperature  in modern living room Man is Adjusting a temperature  in modern living room thermostat stock pictures, royalty-free photos & images


2. Install a tankless water heater.

Demand-type water heaters (tankless or instantaneous) provide hot water only as it is needed. They don’t produce the standby energy losses associated with traditional storage water heaters, which will save on energy costs. Tankless water heaters heat water directly without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit. A gas burner or an electric element heats the water. As a result, demand water heaters deliver a constant supply of hot water. You don’t need to wait for a storage tank to fill up with enough hot water.

Gas boiler and water heater. Home furnace isolated on blue background. System of combi heating. White smart gas boiler with burner for heat water with hot and cold pipe and control. Vector Gas boiler and water heater. Home furnace isolated on blue background. System of combi heating. White smart gas boiler with burner for heat water with hot and cold pipe and control. Vector. tankless water heater stock illustrations

3. Replace incandescent light bulbs.

The average household dedicates 11% of its energy budget to lighting. Traditional incandescent light bulbs convert only about 10% of the energy they consume into light, while the rest becomes heat. The use of new lighting technologies, such as light-emitting diodes (LEDs) and compact fluorescent lamps (CFLs), can reduce the energy use required by lighting by 50% to 75%. Advances in lighting controls offer further energy savings by reducing the amount of time that lights are on but not being used.

Here are some facts about CFLs and LEDs:

  • CFLs use 75% less energy and last about 10 times longer than traditional incandescent bulbs.
  • LEDs last even longer than CFLs and consume less energy.
  • LEDs have no moving parts and, unlike CFLs, they contain no mercury.

4. Seal and insulate your home.

Sealing and insulating your home is one of the most cost-effective ways to make a home more comfortable and energy-efficient, and you can do it yourself. A tightly sealed home can improve comfort and indoor air quality while reducing utility bills. An InterNACHI® energy auditor can assess  leakage in the building envelope and recommend fixes that will dramatically increase comfort and energy savings.

The following are some common places where leakage may occur:

  • electrical receptacles/outlets;
  • mail slots;
  • around pipes and wires;
  • wall- or window-mounted air conditioners;
  • attic hatches;
  • fireplace dampers;
  • inadequate weatherstripping around doors;
  • baseboards;
  • window frames; and
  • switch plates.

Because hot air rises, air leaks are most likely to occur in the attic. Homeowners can perform a variety of repairs and maintenance to their attics that save them money on cooling and heating, such as:

  • Plug the large holes. Locations in the attic where leakage is most likely to be the greatest are where walls meet the attic floor, behind and under attic knee walls, and in dropped-ceiling areas.
  • Seal the small holes. You can easily do this by looking for areas where the insulation is darkened. Darkened insulation is a result of dusty interior air being filtered by insulation before leaking through small holes in the building envelope. In cold weather, you may see frosty areas in the insulation caused by warm, moist air condensing and then freezing as it hits the cold attic air. In warmer weather, you’ll find water staining in these same areas. Use expanding foam or caulk to seal the openings around plumbing vent pipes and electrical wires. Cover the areas with insulation after the caulk is dry.
  • Seal up the attic access panel with weatherstripping. You can cut a piece of fiberglass or rigid foamboard insulation in the same size as the attic hatch and glue it to the back of the attic access panel. If you have pull-down attic stairs or an attic door, these should be sealed in a similar manner.

5. Install efficient showerheads and toilets.

The following systems can be installed to conserve water usage in your home:

  • low-flow showerheads. They are available in different flow rates, and some have a pause button which shuts off the water while the bather lathers up;
  • low-flow toilets. Toilets consume 30% to 40% of the total water used in homes, making them the biggest water users. Replacing an older 3.5-gallon toilet with a modern, low-flow 1.6-gallon toilet can reduce usage an average of 2 gallons-per-flush (GPF), saving 12,000 gallons of water per year. Low-flow toilets usually have “1.6 GPF” marked on the bowl behind the seat or inside the tank;
  • vacuum-assist toilets. This type of toilet has a vacuum chamber that uses a siphon action to suck air from the trap beneath the bowl, allowing it to quickly fill with water to clear waste. Vacuum-assist toilets are relatively quiet; and
  • dual-flush toilets. Dual-flush toilets have been used in Europe and Australia for years and are now gaining in popularity in the U.S. Dual-flush toilets let you choose between a 1-gallon (or less) flush for liquid waste, and a 1.6-gallon flush for solid waste. Dual-flush 1.6-GPF toilets reduce water consumption by an additional 30%.

6. Use appliances and electronics responsibly.

Appliances and electronics account for about 20% of household energy bills in a typical U.S. home. The following are tips that will reduce the required energy of electronics and appliances:

  • The refrigerators or freezer should not be located near the stove, dishwasher or heat vents, or exposed to direct sunlight. Exposure to warm areas will force them to use more energy to remain cool.
  • Computers should be shut off when not in use. If unattended computers must be left on, their monitors should be shut off. According to some studies, computers account for approximately 3% of all energy consumption in the United States.
  • Use efficient ENERGY STAR-rated appliances and electronics. These devices, approved by the U.S. Department of Energy and the Environmental Protection Agency’s ENERGY STAR Program, include TVs, home theater systems, DVD players, CD players, receivers, speakers, and more. According to the EPA, if just 10% of homes used energy-efficient appliances, it would reduce carbon emissions by the equivalent of 1.7 million acres of trees.
  • Chargers, such as those used for laptops and cell phones, consume energy when they are plugged in. When they are not connected to electronics, chargers should be unplugged.
  • Laptop computers consume considerably less electricity than desktop computers.

7. Install daylighting as an alternative to electrical lighting.

Daylighting is a way to draw in natural light from outside to illuminate the home’s interior. It can be achieved using the following approaches:

  • skylights. It’s important that they be double-pane or they may not be cost-effective. Flashing skylights correctly is key to avoiding leaks.
  • light shelves. Light shelves are passive devices designed to bounce light deep into a building. They may be interior or exterior. Light shelves can introduce light into a space up to 2½ times the distance from the floor to the top of the window, and advanced light shelves may introduce four times that amount.
  • clerestory windows.  Clerestory windows are short, wide windows set high on the wall. Protected from the summer sun by the roof overhang, they allow winter sun to shine through for natural lighting and warmth.
  • light tubes.  Light tubes use a special lens designed to amplify low-level light and reduce light intensity from the midday sun. Sunlight is channeled through a tube coated with a highly reflective material, and then enters the living space through a diffuser designed to distribute light evenly.

8. Insulate windows and doors.

About one-third of the home’s total heat loss usually occurs through windows and doors. The following are ways to reduce energy lost through windows and doors:

  • Seal all window edges and cracks with rope caulk. This is the cheapest and simplest option.
  • Windows can be weatherstripped with a special lining that is inserted between the window and the frame. For doors, apply weatherstripping around the whole perimeter to ensure a tight seal when they’re closed. Install quality door sweeps on the bottom of the doors, if they aren’t already in place.
  • Install storm windows at windows with only single panes. A removable glass frame can be installed over an existing window.
  • If existing windows have rotted or damaged wood, cracked glass, missing putty, poorly fitting sashes, or locks that don’t work, they should be repaired or replaced.

9. Cook smart.

An enormous amount of energy is wasted while cooking. The following recommendations and statistics illustrate less wasteful ways of cooking:

  • Convection ovens are more efficient that conventional ovens. They use fans to force hot air to circulate more evenly, thereby allowing food to be cooked at a lower temperature. Convection ovens use approximately 20% less electricity than conventional ovens.
  • Microwave ovens consume approximately 80% less energy than conventional ovens.
  • Pans should be placed on matching-size heating elements or flames.
  • Using lids on pots and pans will heat food more quickly than cooking in uncovered pots and pans.
  • Pressure cookers dramatically reduce cooking time.
  • If you have a conventional oven, place food on the top rack, which will get hotter and will cook the food faster.

10. Change the way you do laundry.

  • Do not use the medium setting on your washer. Wait until you have a full load of clothes, as the medium setting saves less than half of the water and energy used for a full load.
  • Avoid using high-temperature settings when clothes are not very soiled. Water that is 140° F uses far more energy than 103° F for the warm-water setting, but 140° F isn’t that much more effective for getting clothes clean.
  • Clean the lint trap every time before you use the dryer. Not only is excess lint a fire hazard, but it will prolong the amount of time required for your clothes to dry.
  • If possible, air-dry your clothes on lines and racks.
  • Spin-dry or wring clothes out before putting them into a dryer.
Homeowners who take the initiative to make these changes usually discover that the energy savings are more than worth the effort. 
References: by Nick Gromicko, CMI®, Ben Gromicko, and Kenton Shepard of INTERnachi