The Ultimate Guide to Closing Costs In Massachusetts

In this article

1. What is the Average Closing Cost Percentage in MA?
2. What Exactly are Closing Costs?
3. Factors That Will Affect Closing Costs
4. Calculate Your Closing Costs With Our Estimator
5. Who Pays Closing Costs In MA?
6. What are the Seller’s Closing Costs in Massachusetts?
7. When Do Closing Costs Need to Be Paid?

Closing costs can be a bit confusing for pretty much anybody, whether you are a new homebuyer, an experienced one or a refinancing homeowner.

In this article you’ll learn everything you need to know about closing costs in Massachusetts as well as a calculator you can use to estimate what your closing costs are going to be.

What is the Average Closing Cost Percentage in MA?

The average closing costs can range from 2% to 5% of the total loan amount (or purchase price for buyers).

In Massachusetts, homebuyers typically pay between$7,695 to $15,995 in closing costs for a median home price around $638,100. That is between 1.33% and 2.44% of the purchase price and often higher in dollar terms than the national average due to elevated home values, though percentages remain competitive.

What Exactly are Closing Costs?

Closing costs are basically expenses that come with the mortgage loan processing process. They include fees such as loan origination fees, appraisal fees, survey fees, title insurance fees, taxes and others.

Since mortgage loans are offered by lenders, closing costs are also charged by and paid to lenders.

Factors That Will Affect Closing Costs

Not all lenders have the same items on their closing costs so you should expect that value to vary wildly from one lender to another. Also, the location of your house will play a role in determining how much you will pay.

On top of that, appraisers, surveyors and other third parties charge differently for different areas. If you want a more accurate Massachusetts closing costs estimate, contact a local real estate professional or lender and we will give you a breakdown of each item based on your type of loan, property, and location.

Calculate Your Closing Costs With Our Estimator

Who Pays Closing Costs In MA?

In Massachusetts, both the buyer and the seller have their own set of closing costs to pay. The division of these costs can be negotiated between the parties, but traditionally, each have their set of costs to pay. Here’s a general breakdown.

Typically paid by the Seller:

• Real Estate Agent Commissions
• Deed Excise Tax (Transfer Tax)
• Attorney Fees
• HOA Transfer Fees (if applicable)
• Prorated Property Taxes and HOA Dues
• Any Negotiated Repairs or Credits
• Outstanding Mortgages or Liens

Typically paid by the Buyer:

• Lender’s Title Insurance
• Owner’s Title Insurance (optional but recommended)
• Appraisal Fees
• Origination Fees and Discount Points
• Credit Report Fee
• Prepaid Expenses
• Recording Fees
• Attorney Fees
• Home Inspection Fee
• Survey Fee

All of these costs are negotiable, and the specific division of costs should be clearly outlined in the purchase and sale agreement.

Buyers and sellers should consult with their real estate agents or attorneys to ensure they understand all the costs involved in the transaction.

What are the Seller’s Closing Costs in Massachusetts?

Here is a more in-depth look at some common seller’s closing costs you can expect in Massachusetts:

• Real Estate Agent Commissions: This is usually the largest seller closing cost. Typically, the total commission is around 5% to 6% of the home’s sale price, which is usually split between the buyer’s agent and the seller’s agent.
• Deed Excise Tax (Transfer Tax): In Massachusetts, the seller typically pays the state’s deed excise tax. The rate is $4.56 per $1,000 of the sale price (or $2.28 per $500), often rounded up.
• Attorney Fees: In Massachusetts, real estate closings involve attorneys, and the seller may have their own attorney. The fees can vary but are often between $800 and $1,800.
• HOA Transfer Fees: If the property is in a homeowners association (HOA) community, there might be transfer fees or documentation fees associated with changing the ownership.
• Prorated Property Taxes and HOA Dues: Sellers might have to cover their portion of property taxes or HOA dues up to the date of the sale.
• Home Warranty: Sometimes, sellers offer to cover the cost of a home warranty for the buyer, which can range from $300 to $600, on average.
• Any Negotiated Repairs or Credits: If, after a home inspection, certain repairs are needed, the seller might agree to cover these costs.
• Outstanding Mortgages or Liens: The seller will need to pay off any existing mortgages, equity lines of credit, or other liens on the property at closing.
• Miscellaneous Fees: These can include fees for escrow services, courier services, and other transaction-related expenses.

Note that these are general guidelines and the specifics of any deal can vary widely.

The preliminary settlement statement or a detailed breakdown provided by the real estate agent or closing attorney is going to be the best source of information as to which costs you will need to pay as the seller, as this will have the specific information to your particular transaction.

If you need help with this, our Massachusetts mortgage experts can help you with anything to do with closing costs.

When Do Closing Costs Need to Be Paid?

Closing costs are typically paid at the time of the closing of the real estate transaction, which is why they are called “closing costs”. The closing (sometimes called “settlement”) is the final step in completing a real estate transaction.

At this time, the buyer completes the purchase by paying the seller (typically through the escrow or closing agent), and the seller transfers the title to the buyer. Here’s a general overview:

• For the Buyer: Most of the buyer’s closing costs can be rolled into their mortgage, but this depends on the loan type and the lender’s policies. However, some costs, such as the down payment and any costs not covered by the loan, need to be paid upfront at closing. This is usually done in the form of a cashier’s check or wire transfer.
• For the Seller: The seller’s closing costs, such as the real estate agent’s commission, are usually deducted from the proceeds of the sale. This means that the seller does not usually need to bring money to the closing unless they owe more on their mortgage than they are getting from the sale.
• Escrow Account: If the buyer’s lender requires an escrow account (which is common), the buyer will also make an initial deposit into this account at closing. The escrow account is used to pay property taxes and homeowner’s insurance.
• Final Statements: Both the buyer and the seller will receive a closing disclosure or settlement statement prior to closing. This document provides an itemized list of all fees and costs, showing who is responsible for each cost and the amounts to be paid or received at closing.
• Location of Payment: The actual payment of closing costs takes place at the office of the escrow agent, closing attorney, or title company managing the closing.

It’s always a good idea for both buyers and sellers to review their closing disclosure or settlement statement carefully and ask questions if there are any unclear charges. This ensures that all parties understand what they’re paying for and can avoid last-minute surprises.

It is worth mentioning that in Massachusetts you have the option to pay all or part of the costs when making your down payment.