How much are closing costs in Wisconsin and who pays them?
Rob Miller breaks down the average closing costs in Wisconsin, what they include, and strategies for getting the seller to pay them for you.
Rob Miller, Branch Manager at MadCity Home Loans, answers one of the most common qualification questions we get from Wisconsin buyers.
How much are closing costs in Wisconsin and who pays them?
One of the biggest shocks for first-time buyers is learning that your down payment is not the only money you need to bring to the table. You also have to pay "closing costs."
The Rule of Thumb for Wisconsin Closing Costs
As a general rule of thumb in Wisconsin, you should expect your total closing costs to be roughly 2% to 3% of the purchase price of the home.
For example, if you are buying a $350,000 home, your closing costs will typically range between $7,000 and $10,500. This is in addition to your down payment.
What Exactly Are You Paying For?
"Closing costs" is a blanket term for three different buckets of expenses:
- Lender Fees: Things like the appraisal, credit report, processing, and underwriting fees.
- Third-Party Fees: Title insurance, closing fees charged by the title company, and government recording fees.
- Prepaid Items (Escrows): This is usually the largest chunk. Your lender will collect several months of property taxes and homeowners insurance upfront to fund your escrow account so those bills are covered when they come due.
Who Pays Them? (And How to Get the Seller to Pay)
By default, the buyer pays the closing costs associated with getting the mortgage. The seller pays their own closing costs (which are mostly real estate agent commissions and state transfer taxes).
However, in many markets, we can negotiate Seller Concessions (also called Seller Credits). This is where you ask the seller to pay your closing costs out of their profit from the sale.
For example, if a home is listed at $300,000, you might offer $305,000 but ask the seller for $5,000 back in closing cost credits. The seller still nets their $300,000, but you get to roll your closing costs into the loan rather than paying cash out of pocket.
My team works closely with your Realtor to structure these offers to protect your cash reserves.
Related Guide: Want to see exactly what to expect from start to finish? Check out our Complete Wisconsin Home Buying Guide.