Are you trying to budget for a Tempe closing and not sure who pays which fees? You are not alone. Closing costs can feel confusing, and small line items add up fast. In this guide, you will see what buyers and sellers typically pay in Tempe, what the totals look like, and smart ways to lower your costs. You will also learn which fees are negotiable and how loan rules can shift who pays. Let’s dive in.
Tempe closing cost basics
Closing costs are the one-time fees to finalize your purchase or sale. For buyers using a mortgage, a common range is about 2% to 5% of the purchase price. For sellers, the largest cost is usually real estate commission, which often brings total seller costs into the 6% to 8% range of the sale price once you include other items.
Who pays each fee depends on your contract and local custom. Many items are negotiable. Your lender must send you a final Closing Disclosure at least 3 business days before you sign. That document shows your exact charges and cash to close.
Typical escrow timelines in Tempe run about 30 to 45 days with financing. Cash deals can close faster. HOA paperwork, loan type, and repairs can lengthen or shorten this window.
Buyer costs: what you pay
Here are common buyer-paid items in Tempe. Your exact list depends on your loan, contract terms, and negotiated credits.
- Loan origination and lender fees. Lender charges to process and underwrite your loan. You can compare lenders and request a Loan Estimate early to see expected fees.
- Discount points. Optional prepaid interest to lower your rate. You choose this based on your monthly payment goals.
- Appraisal fee. A professional valuation required by most lenders.
- Credit report fee. The cost for the lender to pull your credit.
- Title and escrow fees. You typically pay the lender’s title policy if you have a mortgage. Escrow or closing fees are often split or assigned per contract in Arizona.
- Owner’s title insurance. Protects your ownership. In many Arizona deals the seller pays for the owner’s policy, but this is negotiable.
- Recording fees. County charges to record your deed and, if applicable, your mortgage. Allocation can vary by contract.
- Prepaids and escrows. Prepaid interest, initial property tax and insurance escrows, and your first year of homeowners insurance are common.
- Property tax proration. You pay the portion that applies to your ownership period after closing.
- HOA-related fees. HOAs in Tempe often charge a transfer fee and may require an estoppel certificate. Who pays is contract-dependent.
- Inspections. General home inspection, pest/termite, and any specialty checks you order.
- Survey (if required). Sometimes requested by the lender or desired by the buyer.
- Mortgage insurance. Upfront mortgage insurance can apply to FHA loans or some conventional loans.
- Miscellaneous fees. Wire, notary, and courier fees are common.
On a $400,000 purchase, 2% to 5% translates to roughly $8,000 to $20,000. Your number shifts based on your loan program, whether the seller pays for the owner’s title policy, and any credits you negotiate.
Seller costs: what you pay
Sellers in Tempe usually pay the following. Many items are negotiable.
- Real estate commissions. The largest line item for most sellers. Combined commissions commonly run around 5% to 6% of the sale price.
- Owner’s title insurance. It is common in Arizona for sellers to pay for the owner’s policy, though your contract controls this.
- Escrow or closing fees. Often split or allocated per the purchase agreement.
- Payoff of loans and liens. Your existing mortgage, any lines of credit, and recorded liens must be cleared at closing.
- Prorations. Your share of property taxes, HOA dues, and utilities up to the day of closing.
- Seller credits or concessions. If negotiated, you may contribute to the buyer’s closing costs, repairs, or a rate buydown.
- Recording charges related to the deed. Allocated by custom or per contract.
- Repairs agreed in the contract. Either completed before closing or credited to the buyer.
On a $400,000 sale, a 5% commission is $20,000. Add another 1% to 3% for other seller items, or roughly $4,000 to $12,000. Your net depends on your loan payoff, prorations, and negotiations.
Who pays title and escrow
Arizona closings are handled by title and escrow companies. Local practice in many Arizona transactions is for the seller to pay for the owner’s title policy, while buyers pay for the lender’s policy when they finance. Escrow or closing fees are often split 50/50 or assigned in the contract. Recording fees can be allocated either way by agreement.
Since practices vary by neighborhood, property type, and current market, ask your title company how costs are usually divided and confirm what your contract says.
HOA fees in Tempe
Tempe has many condo and planned communities, especially near employment hubs and ASU. HOAs often charge a transfer fee and require an estoppel letter to confirm dues status. The seller commonly provides the estoppel, and costs are often billed to the seller, but allocation is negotiable. Build time for HOA document delivery into your timeline, since delays can impact closing.
Loan rules that change costs
Your loan program can set limits on who can pay what and how much the seller may contribute.
- FHA loans. Sellers can pay certain buyer closing costs within program limits, commonly up to 6% of the sale price for eligible costs. Always confirm current FHA rules.
- VA loans. Some fees veterans are not allowed to pay can be covered by the seller. VA also allows seller contributions to buyer costs within program guidance. Confirm specifics with your lender.
- Conventional loans. Fannie Mae and Freddie Mac allow seller concessions, with caps that vary by down payment, occupancy, and property type.
- USDA loans. Seller-paid costs are permitted up to program limits.
You can also use lender credits to offset closing costs in exchange for a higher rate. Compare the long-term interest cost against the short-term savings before you choose.
How much cash to close
If you are buying, expect around 2% to 5% of the purchase price for closing costs unless you negotiate credits or use assistance programs. On a $400,000 home, that is about $8,000 to $20,000. Your lender’s Loan Estimate will show an early picture, and your Closing Disclosure will show exact figures at least 3 business days before you sign.
If you are selling, most of your costs are taken from your sale proceeds at closing. Combined commissions commonly run around 5% to 6% of the sale price, with other seller items usually adding another 1% to 3%. Your final settlement statement will show your exact payoffs, prorations, and net.
Ways to lower your costs
You have several levers to reduce out-of-pocket costs in Tempe. Here are practical options to consider.
- Negotiate seller credits. Ask the seller to contribute to your closing costs. The amount you can receive depends on loan program limits and market conditions.
- Compare lenders. Shop rates and fees, and review Loan Estimates side by side. Small differences in origination or discount points can save you thousands.
- Use lender credits wisely. Trading a higher rate for credits can shrink your upfront cash to close. Make sure the long-term interest cost fits your plans.
- Leverage assistance programs. Arizona Housing Finance Authority and local city or county programs have offered down payment and closing cost help for eligible buyers. Check current availability and rules.
- Ask about title and HOA allocations. In many Arizona deals the seller pays for the owner’s title policy. You can also negotiate who pays HOA transfer or estoppel fees.
- Time your closing. Your prepaid interest and initial escrows depend on your closing date. A late-month closing can reduce some prepaid interest, though you will make your first payment sooner.
Closing timeline in Tempe
Plan for a 30 to 45 day escrow if you are financing. Here is a simple flow to keep you on track.
- Get preapproved and request a Loan Estimate. This frames your budget and estimated cash to close.
- Open escrow and order inspections right away. Address repairs early to avoid delays.
- Title orders HOA documents promptly. In HOA communities, allow extra time for estoppels.
- The lender orders the appraisal and final underwriting. Respond to document requests quickly.
- Review your Closing Disclosure. You must receive it at least 3 business days before signing.
- Sign, fund, and record. Once the county records your deed, you own the home and receive keys.
What to verify locally
Exact fees change over time, so verify details for your specific property in Tempe.
- Current recording fees with the Maricopa County Recorder.
- Property tax schedules and proration with the Maricopa County Assessor or Treasurer.
- Title premium and escrow fee allocations with a local title/escrow company.
- Loan-specific fees and allowable seller concessions with your lender.
- Any active assistance programs through state, county, or the City of Tempe housing departments.
Work with a local pro
Closing costs become clearer when someone maps out your exact path. With deep Tempe roots and 18 years of experience, our team helps you plan your budget, compare loan options, and negotiate credits that fit your goals. If you are selling, we model your net sheet, advise on HOA and title allocations, and market your home to maximize your bottom line.
Have questions about your Tempe closing costs or net proceeds? Reach out to Braden Johnson for a tailored estimate and a clear plan.
FAQs
How much are buyer closing costs in Tempe?
- Buyers often see 2% to 5% of the purchase price for closing costs, depending on loan type, prepaids, title allocations, and negotiated credits.
What do sellers usually pay at closing in Tempe?
- Sellers typically pay real estate commissions, owner’s title insurance in many Arizona deals, prorations, and a share of escrow/recording fees, plus any negotiated credits.
Can the seller pay my closing costs?
- Yes. Seller-paid costs are common and negotiable, but loan programs set limits on how much can be credited. Check your loan rules and contract.
Will I know exact closing costs before signing?
- Yes. Buyers receive a Closing Disclosure at least 3 business days before closing. Sellers get a final settlement statement that shows all payoffs and fees.
Are there programs to help with closing costs in Tempe?
- Yes. State and local programs have offered down payment and closing cost assistance for eligible buyers. Availability and rules change, so confirm current options.
Who pays HOA transfer and estoppel fees in Tempe?
- It depends on the contract. In many cases the seller provides the estoppel, and fees are often allocated to the seller, but these items are negotiable.
Do cash buyers still have closing costs?
- Yes. Cash buyers avoid lender fees but still pay title and escrow charges, recording, inspections, prorations, and an owner’s title policy if purchased.
How long does escrow take in Tempe?
- With financing, 30 to 45 days is common. Cash deals can be faster. HOA timelines, appraisal, and repairs can affect the schedule.
