Recurring vs. Non-recurring Closing Costs

For a buyer, closing costs are everything outside of the purchase price that a buyer pays to complete a real estate transaction.

For a seller, closing costs are all the fees, except liens or encumbrances, that are deducted from the purchase price.
 Some examples of closing costs include documentary transfer tax; city / county transfer or property taxes; inspections; loan fees such as points and prepaid interest.
Costs or expenses in an escrow are classified as either recurring or non-recurring.

 

Recurring Closing Costs

Costs which the party pays at closing but will continue to pay after the escrow closes as the normal cost of maintaining the property.

• Fire Insurance Premium
• Homeowner’s Association Dues
• Real Property Taxes
• Interest on the New Loan

Non-Recurring Closing Costs (NRCC)
Costs which are charged ONE TIME ONLY as an expense of closing the transaction.

Title Company Expenses such as:

• Title Insurance Premiums
• Recording Fees
• Endorsements to Title Policies
• Sub-Escrow Fee which may be due Title Company
• Reconveyance Fees
• Documentary Transfer Tax
• Escrow Fees
• Notary Fees
• Messenger Fees

In the case of a refinance:

• Fees Associated With Making an Existing Loan Payoff
• Transfer or Document Fees to a Homeowner’s Association

Lender’s Costs such as:

• Appraisal
• Credit Report
• Loan Origination
• Loan Processing
• Document Fees
• Tax Service Contract

In the case of a sale:

• Real Estate Broker Commissions
• Fees for Property Disclosures or City Reports
• Transaction Coordinator Fee
• Home Warranty Premium