Q & A: Escrow & Closing Costs

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  1. What are closing costs?
  2. What is a contingency?

What are closing costs?

Closing costs are the transaction fees charged by a lender during the purchase of a home. Generally closing costs cover items such as origination fees, title fees, appraisals, discount points, underwriting, etc. When searching for a lender, always ask for a Good Faith Estimate (GFE). A GFE allows you to see all of the lender’s estimated costs for closing prior to committing to the lender.

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What is a contingency?

A contingency is a stipulation added to a real estate contract that would make the contract null or void if the condition were or were not to occur. The addition of contingencies to an offer ensures that the buyer (or seller) is protected during the purchase process. A buyer or seller is able to add any contingency to their offer, but it must be agreed upon by the other party. Examples of common contingencies added to contracts are: financing, inspection, appraisal, and the sale of the buyer’s current home or property.

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