Buying a home is one of the biggest financial decisions you’ll ever make. While qualifying for a mortgage is an important step, it’s only part of the picture. To complete a purchase, you’ll need money set aside for both your down payment and your closing costs.
When you get pre-qualified, your lender should walk you through the type of loan that best suits your needs and explain the fees tied to it. Your real estate agent can also prepare an estimate of closing costs based on the purchase price and loan type, so you know in advance how much money you’ll need at settlement. Just as importantly, your agent should go over the buyer agency contract with you in detail, so you clearly understand what you’re signing and what fees you may be responsible for.
Closing costs in Pennsylvania cover a wide range of items. Some, like transfer taxes, are based on the purchase price, while others, like inspections, are optional, but strongly recommended. Let’s walk through the most common costs you can expect when buying a home.
Title and Settlement Fees
In Pennsylvania, one of the largest portions of your closing costs comes from title-related fees. Title insurance ensures the property is free and clear of liens and the fee is based on the purchase price according to a state-regulated chart. Choosing an “enhanced” policy adds about 10% more. Additional charges include endorsements (around $200–$400), a closing protection letter (about $200), settlement and notary fees (around $250), and recording fees charged by the county (often around $350).
Transfer Taxes and Government Fees
Most buyers in our area can expect to pay a transfer tax of 1% of the purchase price. This is split between the state and your local municipality. However, some areas charge more, so it’s always worth confirming with your agent. You’ll also see small fees for electronic document processing (about $200), a domestic lien search ($30 per person), and a Patriot Act search ($30 per person).
Insurance and Taxes
Before closing, you’ll need to pay one year of homeowners insurance upfront, usually between $1,000–$2,000 depending on the home. Buyers also reimburse sellers for any prepaid property taxes and typically set up an escrow account, so the lender can cover future tax bills.
Broker and Agent Fees
Some transactions include a broker servicing fee, which usually ranges from $300–$600 depending on the real estate agent. When it comes to buyer agent commission, most of the time the seller covers this cost either through the listing agent or as part of a seller concession. However, it’s important to review your buyer agency contract to understand what you may be responsible for if the seller does not pay this fee.
Inspections
While technically optional, inspections are highly recommended. In Pennsylvania, a standard home inspection costs around $600–$750. You may also consider a wood infestation test ($200–$250), radon test ($200–$300), water test ($250–$400), or sewer inspections ($600–$1,000).
Lender Fees
If you’re financing, your lender will charge origination fees, often 0.5% – 1% of the loan amount, plus appraisal and credit report costs (around $750). Additional charges may include document preparation fees ($1,500–$2,000), mortgage insurance (if required), and prepaid interest from the settlement date to month’s end. For VA loans, expect a funding fee determined by your lender. Smaller lender-related charges like flood certification and tax service fees (around $200) also may be included at closing.
Other Possible Costs
If you’re buying in a condominium or homeowners association, expect to cover one or two months of dues at settlement, along with a possible capital contribution.
What This Means for You
Closing costs in Pennsylvania can range widely depending on your purchase price, loan type, and property. For most buyers, they add up to several thousand dollars on top of the down payment. The good news? With the right guidance, there should be no surprises. At Zuber Realty, we make sure you understand every fee upfront, so you can feel prepared and confident on your journey to homeownership.