How Much Are Closing Costs in Colorado 2024?

Purchasing a home is a huge financial decision, and there’s a lot more to consider than just the price of the home. Another significant cost to consider when you’re buying a home is closing costs.

Closing costs are the final expenses that need to be paid in order to close on a real estate transaction, such as taxes, lender fees, and title insurance. Let’s break down how much closing costs are in Colorado, who pays for them, and what costs you can expect to pay as a buyer and as a seller.

How much are closing costs on average in Colorado?

In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Generally speaking, closing costs in Colorado can range anywhere from 2%-5% of the home’s purchase price. But it’s important to remember that this is just a range and the total amount will depend on a number of factors, such as the buyer’s loan program or negotiations made with the seller.

For example, if you’re buying a home in Denver, which has a median sale price of $619,750, closing costs could range anywhere from $12,395 to $30,988. Or, let’s say that you’re buying a home in Colorado Springs, which has a median sale price of $455,000. Closing costs for a home here could cost you anywhere between $9,100 and $22,750.

Who pays closing costs in Colorado?

Generally, both buyers and sellers can expect to pay closing costs. But, each party’s closing costs amount will vary depending on what they are required to pay. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are deducted from the home sale proceeds.

Buyer closing costs in Colorado

Closing costs in Colorado for homebuyers typically range from 2%-5%. If you paid earnest money, this amount will be subtracted from your closing costs, which will reduce the total amount you owe at closing. Earnest money is typically between 1%-3% of the home’s price. Here are a few common closing costs that buyers typically cover:

Appraisal fee: Home appraisals, which typically range from $300 to $500, are usually paid for separately at the time of the service. However, if not, you’ll need to pay for this at closing.
Inspection fee: Although not required, a home inspection is highly recommended. Home inspections generally range from $300 to $500 in cost and are usually paid at the time of service. However, if not, it will need to be paid at closing.
Loan origination fee: Your lender may charge a fee for creating your loan. It’s important to inquire about what this cost covers and whether it’s negotiable to potentially avoid high costs.
Loan processing fee: Lenders may also charge a loan processing fee, covering underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible waivers.
Loan discount points: If you buy discount points to lower your interest rate, you’ll pay a one-time fee at closing. These points can lower your rate by 0.25% to 0.5%, but consider your long-term homeownership plans before paying for a reduced rate.
Private mortgage insurance (PMI): When your down payment is under 20%, you’re typically required to pay PMI. Some loans allow upfront PMI payment at closing, giving you the choice between higher upfront costs or increased monthly payments.
Title insurance: Title insurance is a one-time closing cost, with buyers commonly paying for both lender and owner policies.
Homeowners insurance: In Colorado , your annual homeowner’s insurance premium may be part of your closing costs.
Homeowners Association dues: For homes in HOA-managed communities, you might have to pay one month’s dues at closing, which can vary depending on the property and covers maintenance and operational expenses.
Property taxes: As part of closing costs in Colorado , you may be required to prepay a portion of your property taxes at closing.

Seller closing costs in Colorado

The closing costs paid by sellers in Colorado can vary, but here are some of the common fees and costs covered by sellers:

Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with their agent.
Homeowners Association fees: Sellers are generally responsible for settling any outstanding HOA fees or assessments up to the closing date, and they may need to provide HOA documents to the buyer as part of the sale.
Property taxes: Sellers are responsible for any property taxes that have accrued but not yet been paid up to the closing date. These unpaid property taxes are typically prorated for the months that you owned the property.
Title insurance: Owner’s title insurance is another common closing cost in Colorado paid for by the seller.
Transfer taxes: In Colorado, sellers are responsible for paying state and possibly local transfer taxes. These taxes are typically a percentage of the property’s sale price and can vary widely by jurisdiction.

Median home sale price data from the Redfin Data Center during July 2024.

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