How Much Should I Plan on Spending on Transaction Fees?

If you’re a seasoned home buyer/seller, then you’re well aware of all of the costs associated with completing a real estate transaction. However, these transaction fees are often overlooked by first-time buyers, and can come as a pretty huge shock when starting to discuss the process with their Realtor. I can’t speak for other states, but here are some expenses you can expect to encounter when buying and selling in Colorado:



1. Inspection

General ($350)
Even when buying new construction, I can’t emphasize enough how important it is to have an objective set of (trained) eyes look over the property.

Sewer ($100)
Unless the property is in a development that takes care of the sewer line, buyers should have a scope of the line done.

Radon ($150)
Unless the property is in a highrise or condo, there’s a chance for high levels of radon gas, and this is an easy test.

2. Appraisal ($475)

If you’re using financing on the purchase, the lender is going to want an appraisal to verify the property’s value.

3. Loan Origination/Servicing Fees with Lender

Credit Report ($40)

Flood Cert ($10)

Daily Interest
Depends on your loan, if you have one, and the terms.

Lender’s Title Insurance ($500 - $1,500)
Will vary based on the purchase price of the home.

4. Taxes

Government Recording Charges

County Taxes

Recording Charges (.0001 x Purchase Price)

Prorated Taxes
Taxes in Colorado are paid in arrears, so seller will be prorated from January 1st of the year of closing to the date of closing. The buyer is responsible from the date of closing through December 31st.

5. HOA (these will most likely be covered by the seller)

Status Letter ($300)

Transfer Fees ($100)

HOA Dues for the Month of Closing ($40 - $400)

6. Homeowners Insurance ($800 - $1,500)

7. Closing Fee ($150 - $200)

8. Home Warranty ($300 - $400)

Not necessary, but provides buyers with good protection on appliances and systems of the home not covered by homeowners insurance.

9. Movers ($200 - $1,000)



1. Title Insurance ($1,000 - $2,500)

Varies based on purchase price. Seller is required to furnish to buyer free, clear and insurable title. This is a separate policy from the buyer’s lender title insurance.

2. HOA

Status Letter ($300)

Transfer Fees ($100)

Any unpaid dues

3. Taxes

Prorated Taxes

4. Agent Commissions

Unless otherwise negotiated, the seller pays brokerage fees in Colorado. In order to be listed on the Denver Multiple Listing Service, a listing must offer a cooperating broker compensation.

5. Seller Paid Closing Costs

The seller can help the buyer out by paying for some of their closing costs. These seller concessions can only be applied to buyer fees associated with originating the loan (appraisal, underwriting fees, servicing fees, etc.).

6. Closing Fee ($150 - $200)

*All items in italics are subject to a given transaction.


Needless to say, there are a lot of fees associated with a real estate transaction. If anything out of the ordinary comes up throughout the deal, don’t be surprised to see these estimates change wildly. Keep in mind that these numbers are just that; estimates. Not all will apply to every situation (HOA fees for example). A good rule of thumb for buyers getting ready to start looking for homes to purchase is to expect to spend 3% of the purchase price on various fees throughout the process. For sellers, this will appear higher on paper as they pay the brokerage fees.

Silver lining for buyers: their first mortgage payment isn’t due until the 1st, the month following closing (ex. Closing is March 11th, so 1st payment is due May 1st)

If you're a first-time home buyer and are interested in learning more about the process, check out our Home-Buying Guide. As always, please let us know if we can answer any questions for you!