What is typically included in the closing costs of a real estate transaction?

The inclusion of various fees, including title insurance and appraisal fees, is a key component of closing costs in a real estate transaction. Closing costs are expenses that buyers and sellers incur to finalize the purchase of a property, and they typically cover a range of necessary services.

Title insurance is particularly important as it protects the buyer against any potential issues related to the property's title, ensuring that there are no unresolved claims or liens against it. Appraisal fees are also included because they are necessary for the lender to determine the property's value before approving a mortgage. These costs are usually calculated as part of the overall expenses that must be settled at closing to complete the transaction smoothly.

In contrast, while home inspections and home warranty fees may be related to the purchase of a home, they are generally considered separate from closing costs. Additionally, future property taxes are not part of the closing costs; instead, they are an ongoing expense that the homeowner will need to pay after the purchase is complete.