If you’re financing the purchase of a house, then you know to expect closing costs during the process. These include title insurance, taxes, appraisal fees, attorney fees, and more. But what happens when you don’t finance the house and instead pay with cash? Are there any associated closing costs with all-cash deals? Let’s look at some of the fees you may be required to pay at closing when buying with cash.

Taxes

First of all, you’ll be on the hook for taxes when you’re closing on your cash purchase. These include real estate transfer taxes that may be charged by the city or county where you are buying the home. And don’t forget that even though your home is paid for from the beginning, you will still be required to pay property taxes every month.

Title insurance

Title insurance is another fee that you may end up paying at closing. While title insurance is usually optional, it is strongly recommended when you purchase a home. While a title search may not have uncovered any outstanding issues with the title of the home, that doesn’t mean something won’t come up down the road. This could include liens, incorrect names, or title defects. The older the home, the more potential there is for problems. Title insurance helps to protect you.

Title Notary

Documents will need to be notarized as part of the closing process. You can expect to pay fees associated with a notary. They will verify your signatures and ensure that all documents are official.

Title record processing

All the documents that are processed during your closing will need to be processed and filed with the County Recorder. There will be fees associated with these transactions.

Appraisal

If you’re paying cash for a home, then you may not need to get an appraisal. Appraisals are generally required by a lender to ensure that a buyer has not agreed to pay more than what the home is worth. However, as a cash buyer, you can still opt to have an appraisal done on the home, which will have associated fees.

Home inspection

A home inspection is another cost you may incur when paying for a home with cash. While you can opt to waive the inspection, most agents agree that getting an inspection is important. The home inspection will uncover any potential issues with the property which can inform your negotiations with the seller.

Escrow

Finally, you can’t escape escrow even if you’re purchasing a home with cash. An escrow company will act as a neutral third party to the buyer and seller. They handle collecting all the money and documents associated with the closing process. This includes the earnest money deposit and the completed and signed deed.

How much can you expect to pay in closing costs with a cash deal?

As you can see, even if you’re paying all cash, you aren’t getting out of paying closing costs on your home purchase. In fact, you can expect to pay up to three percent of the cost of the home in closing costs with a cash purchase. Ultimately, if you’re saving up to purchase a home with cash, then don’t forget to factor in these costs when you make your offer.