Glossary
Closing costs
Closing costs are the fees paid to complete a purchase, sale or refinance, such as title insurance, settlement fees, recording fees, lender fees and transfer taxes.
A flip pays closing costs twice, once to buy and once to sell. A BRRRR pays them on the purchase and again on the refi. Treat each set as its own line.
What is included
- Buying: settlement or attorney fee, title insurance, recording, inspection, and in some states buyer recordation taxes.
- Loan: points, lender fees, appraisal.
- Selling: commissions, seller concessions, settlement, and the seller's transfer tax.
- Refi: lender fees, appraisal, title, recording, and prepaid escrows.
Seller transfer tax by state
| State | Rate | Tax |
|---|---|---|
| Virginia (grantor tax) | 0.10% ($0.50 per $500) | $320 |
| North Carolina (excise) | $1 per $500 | $640 |
| West Virginia | $2.20 state + $1.10 county per $1,000 | $1,056 |
- Commission (5.5%)
- $17,600
- Seller concessions (1%)
- $3,200
- Excise tax ($1 per $500)
- $640
Selling costs before settlement fees$21,440
Some northeastern NC counties, including Dare and Currituck, add a 1% local land transfer tax. Rates change, so confirm locally.
Common mistakes
- Using one flat percent for every state. Transfer and recordation taxes vary a lot.
- Forgetting refi closing costs in a BRRRR. They reduce the cash you get back.
- Leaving lender points out of closing costs and out of your peak cash math.
Run The Deal applies state rules for Virginia, North Carolina and West Virginia. See the Hampton Roads and North Carolina calculators.
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