Connecticut Closing Costs: A Complete Guide for Buyers and Sellers in 2024

Understanding Connecticut closing costs is the final, critical step in a real estate transaction. For homebuyers, these fees typically amount to 2% to 5% of the home's purchase price, while sellers can also expect to pay a significant share. This guide breaks down who pays what, providing a clear budget forecast for your Connecticut home purchase or sale.

What Are Typical Closing Costs in Connecticut?

Closing costs are the fees and expenses paid to finalize a mortgage and transfer property ownership. In Connecticut, the total cost is heavily influenced by the home's sale price. Based on July 2024 data, a buyer in Greenwich, where the median sale price is $2,195,000, could face closing costs between $43,900 and $109,750. Conversely, a buyer in Stamford, with a median price of $691,000, might pay between $13,820 and $34,550. It's crucial to remember this is an estimate, and your final amount will depend on your loan type, property location, and negotiations with the seller.

The table below illustrates potential closing costs based on different home prices:

What Closing Costs Do Buyers Pay in Connecticut?

Connecticut homebuyers are responsible for several fees, often paid out-of-pocket at closing. Your earnest money deposit, typically 1-3% of the purchase price, is usually credited toward these costs. Key buyer closing costs include:

• Loan Origination and Processing Fees: These are lender charges for creating and underwriting the mortgage. It's essential to ask what these fees cover and if they are negotiable.
• Appraisal Fee: Lenders require a home appraisal—a professional assessment of the property's market value—to ensure it supports the loan amount. This usually costs between $300 and $500.
• Home Inspection Fee: While not mandatory, a home inspection is highly recommended to identify potential issues. A professional inspection generally costs $300 to $500.
• Title Insurance: This is a one-time premium that protects both the lender (lender's policy) and the buyer (owner's policy) from future claims or disputes over the property's legal ownership, or title. Buyers typically pay for both policies.
• Prepaid Costs: You may need to prepay items like property taxes, homeowner's insurance premiums, and initial homeowners association (HOA) dues at closing.

What Closing Costs Do Sellers Pay in Connecticut?

Seller closing costs are typically deducted directly from the sale proceeds. The most significant expense is often the real estate agent commission, which is negotiable. Common seller costs include:

• Real Estate Agent Commissions: This fee is split between the buyer's and seller's agents. Sellers should discuss commission rates and services with their agent beforehand.
• Transfer Taxes: Connecticut levies a real estate conveyance tax on the transfer of property ownership. The seller is responsible for this state tax, and some municipalities may add a local tax.
• Title-Related Fees: Sellers typically pay for the owner's title insurance policy for the buyer, which provides the new owner with protection against title defects.
• Property Taxes and HOA Fees: Sellers must settle any outstanding property taxes. If the home is in an HOA, sellers might need to pay transfer fees and provide up-to-date HOA documents for the buyer.

Key Takeaways for Your Connecticut Transaction

Navigating closing costs requires preparation. Buyers should budget for an additional 2-5% of the home's price beyond the down payment. Sellers must understand that their net proceeds will be reduced by their share of the fees. The final closing disclosure, provided before settlement, will itemize all costs. Based on our experience assessment, reviewing this document carefully and asking questions is a critical final step to ensure a smooth transition into your new Connecticut home.