The housing market in South Carolina has experienced steady growth since 2012, due to positive economic trends, such as solid job growth, rising incomes, and increased tourism. The median home value of $143,600 in the state, slightly higher than where it was at the pre-housing bubble peak. Housing prices are rising fastest in the Charleston region, where the job growth is among the highest in the nation, and the median home value is $252,700. As home values throughout the state continue to increase, homebuyers need to be aware of the impact closing costs have on a home's total cost. Closing costs can amount to 2 to 5% of the home’s value, which can add several thousand dollars to the cost of a home. Understanding what goes into closing costs can help homebuyers ensure they are paying no more than is absolutely necessary.

Average Closing Costs in South Carolina

Based on a home purchase price of $200,000 and a down payment of 20%, homebuyers in South Carolina spend on average $919 for lender fees and $1,293 for third-party fees, for a total of $2,213 in closing costs. This is above the national average of $2,084.

As for individual closing costs, homebuyers spend an average of $835 for origination fees, $454 for an appraisal, $723 for legal and settlement fees, $575 for a survey, $111 for courier services, $77 for tax services and $10 for flood certification. Not all costs are listed because lenders vary what and how they charge for certain costs. Title insurance fees, which can add as much as $1,000 to closing costs, are not included because they are more difficult to calculate as an average.

All costs associated with the purchase of a home are presented to the homebuyer in a good faith estimate. Lender costs are guaranteed as estimated, while third-party fees can vary by as much as 10%. Buyers have the opportunity to review all final costs prior to the close of escrow.

What Goes Into Closing Costs in South Carolina

Closing costs in South Carolina tend to vary across the state, depending on the lender, the market, the type and cost of the property. However, homeowners can expect to see the following — more common — closing costs on the good faith estimate provided by the lender.

Loan origination fees are is an all-inclusive fee charged by the lender to cover most of the costs associated with processing the loan, including origination, underwriting, document preparation, and funding. With most lenders, the fee amounts to 1% of the home’s value and is charged as a point, with one point equivalent to 1%. Discount points can be added to the closing costs for homebuyers who want to lower the loan interest rate, and most lenders allow the points to be included in the loan as a way to minimize out-of-pocket costs at closing.

An appraisal fee verifies the property value. Lenders require a home appraisal to be performed. Lenders typically hire an independent appraiser who is paid from the closing costs.

In South Carolina, all of the legal functions for settling escrow are performed by the title company, which will result in settlement costs. Although homebuyers are not required to hire their own attorney, they may do so at their own expense.

Depending on the type of property and its location, some lenders may require a property survey to verify the property lines.

In the event of a default, mortgages are subordinated to property taxes, so lenders may establish a tax impound account that can be monitored in order to ensure that taxes are current.

Buyers are responsible for purchasing title insurance on the lender to protect its position as the first mortgage holder. To guarantee a clear title at closing, sellers are required to purchase title insurance on the buyer.

The Bottom Line

Homebuyers should remember that closing costs are a big part of the home buying process, and can affect their overall purchase price. There are a number of different factors to consider along with the lender and third-party fees. It's always important to factor in things like appraisals, surveys, tax services, and other fees before you are ready to sign on the dotted line.  

Tennessee (TN): Average Closing Costs

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