What are closing costs and who pays for them?

Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They include upfront loan points, title insurance, escrow (closing charges), document fees, prepaid interest and property taxes. Unless these charges are rolled into the loan, they must be paid when the home is closed. In the state of Washington, it’s customary for both buyer and seller to share in certain closing costs, while others remain the sole responsibility for each party. For instance, the escrow fee is typically split between buyer and seller, while title insurance, real estate commissions and excise taxes are exclusively paid for by the seller. At closing, the buyer is responsible for their pre-paid portion of property taxes, loan and origination fees.