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 increasing tourism. The median home value of $136,000 is precisely 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 $258,000. 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 3 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 and what homebuyers can expect to pay for these costs can help homebuyers ensure that 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 $1,058 for lender fees and $837 for third-party fees, for a total of $1,895 in closing costs. This is slightly above the national average of $1,847.

As for individual closing costs, homebuyers spend an average of $1,108 for origination fees, $414 for an appraisal, $656 for legal and settlement fees, $575 for a survey, $125 for inspections, $100 for courier services, $75 for tax services and $10 for flood certification. Not all costs are listed because lenders vary in 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 and 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: This 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.

Appraisal fee: In order to verify that the property is valued properly, lenders require a home appraisal to be performed. Lenders typically hire an independent appraiser who is paid from the closing costs.

Settlement/Closing costs: In South Carolina, all of the legal functions for settling escrow are performed by the title company. Although homebuyers are not required to hire their own attorney, they may do so at their own expense.

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

Tax service: 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.

Title Insurance: 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.

Tennessee (TN): Average Closing Costs

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