Are you trying to figure out how much cash you’ll need to close on a home in Charlotte? You’re not alone. Closing costs can feel confusing, and the totals change based on price, loan type, and what you negotiate. In this guide, you’ll learn what closing costs cover, who usually pays what in North Carolina, how Mecklenburg County specifics come into play, and simple steps to estimate your numbers early. Let’s dive in.
What closing costs cover
Closing costs include the one-time fees and prepaids needed to complete your sale or purchase. They fall into four buckets:
- Third-party services, such as title work, inspections, and appraisal.
- Lender and loan charges, such as origination, processing, and underwriting.
- Government charges, such as transfer taxes and recording fees.
- Prepaids and escrow deposits for items like homeowner’s insurance and property taxes.
It helps to separate two ideas: your total transaction costs and your cash needed at closing. For buyers, cash to close can include down payment, closing costs, and any prepaid items. For sellers, it includes commissions, excise tax, and any agreed credits or payoffs.
Who usually pays in North Carolina
Buyer-paid costs
- Lender fees if you finance, such as application, origination, processing, or points.
- Appraisal, credit report, flood certification, and the lender’s title insurance policy.
- Inspections you order, such as home, termite, survey, or radon.
- Title search and portions of closing or settlement fees, depending on your agreement.
- Prepaid homeowner’s insurance, prepaid interest, and initial escrow deposits your lender requires.
- Recording fees for mortgage documents and the state mortgage intangible tax when you take out a new loan.
- Owner’s title insurance is common for buyers to obtain. Who pays the premium can be negotiated.
Seller-paid costs
- Real estate commission, which is negotiated with your listing broker and is often the largest cost.
- Payoff of any existing mortgage and liens, plus per-day interest to the payoff date.
- North Carolina real estate excise tax, a state transfer tax that is customarily paid by the seller.
- Deed preparation and required seller documents, and sometimes portions of settlement fees.
- Prorated property taxes, HOA dues, and any repairs or credits agreed in the contract.
Negotiable items
- Who pays the owner’s title insurance premium.
- Seller concessions to cover part of the buyer’s closing costs, within loan program limits.
- How you split settlement or closing fees.
- Whether some prepaids are rolled into the mortgage, subject to lender rules.
North Carolina and Mecklenburg specifics
State excise tax
North Carolina charges a state real estate excise tax that is commonly calculated at 1 dollar per 500 dollars of the sales price, which equals about 0.2 percent. It is customarily paid by the seller, although your contract can assign it differently.
Mortgage intangible tax
If you take out a new mortgage in North Carolina, the state charges an intangible tax tied to the loan amount. Borrowers usually pay this at closing. Your lender will calculate the exact amount based on current rules.
Recording fees in Mecklenburg County
The Register of Deeds charges recording fees to record the deed, mortgage, and other documents. Fees are modest on a per-document basis and can vary based on page count and document type. Who pays can be negotiated.
Title insurance custom in NC
In many North Carolina transactions, it is customary for the seller to pay for the owner’s title insurance policy that protects the buyer. The lender’s policy, required when there is a mortgage, is paid by the borrower. Customs vary by area, so confirm with your closing attorney or title company.
Prorations for taxes and HOA
Mecklenburg County property taxes and HOA dues are prorated at closing based on the closing date. The seller pays for the time they owned the home, and the buyer covers the remainder of the period. Your final settlement statement shows these prorations.
How your loan type changes costs
Conventional loans
You can expect lender fees, appraisal, and escrow deposits, plus private mortgage insurance if you put less than 20 percent down. PMI affects your monthly payment. Some options include lender-paid PMI or upfront charges that can adjust your cash to close.
FHA loans
FHA requires an upfront mortgage insurance premium. Many buyers choose to finance that premium into the loan. If you do not finance it, you will bring more cash to closing. FHA often allows a lower down payment, which helps first-time buyers.
VA loans
VA loans include a funding fee that you can often finance. VA rules allow seller concessions up to specific limits. With the right negotiation, this can reduce your cash due at closing.
USDA loans
USDA loans include a guarantee fee and other program-specific charges. Many buyers finance these fees, and USDA also has rules about how seller credits can be used.
Cash purchases
Cash buyers skip lender fees, mortgage recording fees, the appraisal ordered by the lender, and the mortgage intangible tax. You will still budget for title work, recording a deed, inspections you choose to order, and prorations.
What to budget in Charlotte
For a financed buyer, a common range is about 2 to 5 percent of the purchase price for closing costs, not counting your down payment. Cash buyers typically pay less because they avoid lender-related charges. For sellers, a common total cost range is about 6 to 10 percent of the sale price. That range usually includes commission, the state excise tax, routine seller closing items, and any concessions you offer.
Commissions in the Charlotte area are negotiated between the seller and listing broker. Combined listing and buyer broker commissions often range around 5 to 6 percent of the sale price, though the exact rate can vary.
Sample math for common price points
These examples are rounded estimates to help you plan. Your actual numbers depend on your contract, lender, and closing date.
Example A, 350,000 sale
- Buyer with financing: about 7,000 to 17,500 in closing costs.
- Seller: commission at 5.5 percent is 19,250, excise tax is about 700, other costs 1,000 to 3,000. Estimated total is about 21,000 to 24,000, roughly 6 to 7 percent.
Example B, 550,000 sale
- Buyer with financing: about 11,000 to 27,500 in closing costs.
- Seller: commission at 5.5 percent is 30,250, excise tax is about 1,100, other costs 1,500 to 4,000. Estimated total is about 33,000 to 36,000, roughly 6 to 6.5 percent.
Example C, 900,000 sale
- Buyer with financing: about 18,000 to 45,000 in closing costs.
- Seller: commission at 5.5 percent is 49,500, excise tax is about 1,800, other costs 2,000 to 5,000. Estimated total is about 53,000 to 56,000, roughly 6 to 6.2 percent.
Quick checklists to estimate early
Buyer steps
- Get prequalified or preapproved and ask for a Loan Estimate with line items for fees, prepaids, and cash to close.
- Ask for estimates of origination charges, appraisal, prepaid interest, and escrow deposits.
- Request fee quotes from a local title or closing attorney, including title insurance and settlement fees.
- Budget for inspections such as home, termite, or specialty tests you may need.
- If using FHA, VA, or USDA, ask how program fees affect your cash and whether they can be financed.
Seller steps
- Ask your listing agent for a seller net sheet that shows commissions, excise tax, prorated taxes, payoff, and typical seller fees.
- Request a payoff statement from your lender so you know the exact payoff and daily interest.
- Decide whether you will pay for the owner’s title policy if customary in your area and how you want to approach buyer closing cost credits.
- Get estimates for any repair credits, HOA statement fees, or other required items.
Negotiation and credit tips
- Seller credits can reduce buyer cash due at closing. Loan programs set limits, so confirm with your lender.
- Buyers can trade a slightly higher price for seller credits if it helps with cash flow and the appraised value supports it.
- Rate buydowns can be funded by the seller. This can lower the buyer’s interest rate for a period or for the life of the loan.
Documents to gather
- Signed purchase contract that clearly states who pays which fees.
- Loan Estimate for buyers or draft settlement statement for both sides.
- Mortgage payoff statement for the seller.
- HOA statements or estoppels if the property belongs to an association.
Final thoughts and next steps
Closing costs are manageable once you break them into parts and get early estimates. In Charlotte and across Mecklenburg County, most items follow clear state rules and local customs. Your totals will come down to loan type, price point, and negotiation. The best move is to price out your fees early, confirm who pays what in your contract, and keep your lender and closing attorney in the loop.
If you want steady, plainspoken guidance from offer to close, reach out to Integrity Realty Group, LLC. Make Every Move With Integrity.
FAQs
In Charlotte, who pays closing costs?
- Many items are negotiable. In North Carolina, sellers typically pay agent commissions and the state excise tax. Buyers usually pay lender fees, prepaids, the mortgage intangible tax if they finance, and the lender’s title policy. Owner’s title premium is often seller-paid by custom but can be negotiated.
Can a seller pay a buyer’s closing costs in NC?
- Yes. Seller concessions are common and can cover buyer closing costs up to loan program limits. VA, FHA, USDA, and conventional loans each set their own caps and rules.
Do buyers pay property taxes at closing in Mecklenburg County?
- Taxes are prorated to the closing date. The seller pays for the portion of the year they owned the home, and the buyer pays the remainder. Your settlement statement shows the exact amounts.
How much should a first-time buyer budget for closing costs in Charlotte?
- A financed buyer often budgets about 2 to 5 percent of the purchase price for closing costs, not including the down payment. Cash buyers usually pay less because they avoid lender fees.
How do commissions affect a seller’s net in North Carolina?
- Commissions are negotiated with your listing broker and are often the largest single seller cost. Combined listing and buyer broker commissions commonly range around 5 to 6 percent of the sale price, plus the state excise tax near 0.2 percent and routine seller fees.
