What are "Closing Costs"?

Closing costs refer to the various fees and expenses incurred when finalizing the purchase of a property, which are separate from the actual sale price of the home. These costs can include a range of services and charges related to the transaction, such as title insurance, attorney fees, appraisal fees, loan origination fees, and recording fees. Understanding that closing costs are specifically linked to the transfer of ownership helps clarify their significance in the overall home-buying process.

The other options address specific aspects or costs associated with home buying, but they do not encompass the broader definition of closing costs. While home repairs, appraisals, and inspections may be part of the buying process, they are not, by definition, included in closing costs, which are expenses directly related to finalizing the sale. Home warranty costs, although relevant to property ownership, fall into a different category of expenses that are not part of the closing process. Thus, defining closing costs as the expenses incurred in the transfer of property, exclusive of the sale price, captures their essence and importance in real estate transactions.