Average Closing Costs in Arkansas

Though closing costs vary, often substantially, based on many factors, the average closing costs in Arkansas equal 0.9% of a home's purchase price. A buyer purchasing a $200,000 home in Arkansas can expect closing costs of about $1,800. When shopping for a home in Arkansas, it is important to factor potential closing costs into price estimates. Closing costs represent various fees that get paid to lenders and other third-party entities at a real estate closing. As a general rule, total closing costs rise and fall in tandem with the home's purchase price. Also, since a bulk of closing costs are lender charges, paying cash for a home often reduces closing costs significantly.

Closing costs in Arkansas fall in line with national averages, which range from $1,800 to $1,900. Arkansas homebuyers pay closing costs similar to residents of neighboring states, including Mississippi, Louisiana and Tennessee. 

With a median home price significantly below the national average, Arkansas is a place where middle-class and working-class families can become homeowners, with abundant options. As of April 2016, the median Arkansas home value, as reported by Zillow, was $115,400, a bargain compared to the national median sales price, which in the midst of a strong recovery from the late-2000s crash, sits above $180,000.

What Goes Into Closing Costs

Two types of charges make up most closing cost scenarios: lender fees and non-lender fees. Lender fees get paid to the bank or mortgage company providing the funds at closing. Non-lender fees come from other third-party entities, such as closing attorneys, title companies, home appraisers and inspectors and credit bureaus.

Lender Closing Costs

In Arkansas, the majority of closing costs are lender fees. On a $200,000 home purchase in which closing costs total $1,800, as much as $1,100 can represent lender fees. The largest lender fee is the origination fee. This charge, generally a fixed percentage of the loan amount, represents the bank or lender's fee for providing its service. With mortgages issued before the 2008 meltdown, origination fees often reached as high as 3 or 4%, particularly for borrowers with marginal credit. Regulators and public sentiment have since reined in such exorbitant charges. As of 2016, origination fees typically represented less than 1% of the loan amount.

Additional lender closing costs may include a document preparation fee and a tax service fee, though neither typically exceeds $100.

Non-lender Closing Costs

Apart from lender closing costs, some or all of the following non-lender fees may apply to a real estate transaction in Arkansas. The largest, when applicable, is the survey fee, which some lenders require. This fee ranges from $500 to $550, and pays for a licensed property surveyor to examine the property and determine where its exact boundaries lie.

Typically, the appraisal fee and settlement fee each cost between $300 and $500. The appraisal fee, required by nearly all lenders, pays for a licensed home appraiser to estimate the home's market value based on its condition, location and recent sales prices of comparable homes. The settlement fee goes to the title company representative or attorney, who executes the closing and transfers the property's title from seller to buyer.

Most buyers also want a home inspection, and many lenders require it. An inspector checks the home for structural integrity and ensures that it is free of pests, such as termites. The fee for this service varies from $100 to $150 in Arkansas.

Lastly, an Arkansas homebuyer may be subject to a courier fee, flood certification fee and credit report fee. None of these charges should exceed $100.

Delaware (DE): Average Closing Costs

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