Fueled by a strong job market, mild climate and booming tech industry, Oregon’s population passed the 4 million mark in 2015. There are many reasons why people choose to call this western state home: from its scenic landscape and marine climate and strong business climate to its median home values. According to Zillow, the average home value in the state was $334,100 as of August 2018, compared to neighboring California and Washington, where median home values reached $539,400 and $370,700 respectively. While Oregon homebuyers may be saving on the actual price of a home, they aren't saving much on closing costs.

The average closing costs for in Oregon are fairly high, ranking the 18th most expensive in the country. But at $2,122, they are still less than those in California and Washington, where closing costs averaged $2,225 and $2.254 each. The average closing costs in Oregon amount to 2 to 5% of the home sale price and include loan origination fees, appraisal fees, tax service fees, title insurance, home inspection and survey. Closing costs vary widely from state to state, and from lender to lender. Before embarking on a home purchase, it is helpful to know what you are paying for in the closing process, and how much you can expect to pay. When comparing closing costs, you should start by learning what the average homebuyer has to pay in your state.

Average Closing Costs in Oregon

In the state of Oregon, the average origination fees charged by lenders total $990. The average fees charged by third parties involved in the transaction are $1,132, which brings the total average closing costs to $2,122. That is just above the national average of $2,084, and about $100 less than the average closing costs in California.

On average, borrowers pay the lender $58 for document preparation, $899 for the origination fee and $76 for tax services. Third-party charges include $527 for an appraisal, $482 for closing or settlement, $25 for credit reports, $10 for flood certification, $100 for postage or couriers and $415 for a survey. Title insurance fees are not included in these averages because lenders have a difficult time estimating them, but they can add as much as $1,000 to the total closing costs.

The lender should provide the borrower with a good faith estimate, which lists all of the costs and fees. Lender origination fees are generally fixed, while third-party fees tend to vary, usually up to 10%. The lender should provide a closing disclosure statement within three business days before the closing of the loan. The disclosure statement will outline all the fees, which can be compared with your good faith estimate to find any variances. Request an explanation for any variance.

What Goes Into Oregon's Closing Costs?

The loan origination fee is often quoted in points, with one point representing 1% of the loan. Points cover the costs of processing the loan. Buyers can sometimes lower their interest rates by paying additional points. Additional points are added to closing costs as discount points.

Lenders order an appraisal — which results in an additional fee — to verify that the value of the home is worth at least the sales price and is justified based on recent sales of comparable homes.

Because mortgage loans are subordinate to property tax liens, lenders pay an independent tax service to monitor your property tax payments in order to ensure that they are current.

The closing or settlement fee covers the legal aspects of closing escrow, which are typically handled by the title company.

Lenders require title insurance to ensure that their loan has first position with the property. Sellers buy title insurance for the buyer to ensure that they have clear title to the property upon closing.

If a homebuyer wants the home inspected, it is his or her responsibility to cover the cost, which can be paid as part of closing costs, but it is not included in the good faith estimate.

Seller’s Closing Costs

In Oregon, the seller is required to pay half of the escrow fees. The seller also pays for the sales commission, pest inspection, if required, property taxes owed and a home warranty, if applicable. In addition, the seller must purchase title insurance on the buyer.

The Bottom Line

While the lower home values may be attractive to potential homebuyers, it is always important to remember there are additional fees associated with closing costs. When added up, they can boost up the actual purchase price of a home. In Oregon, homebuyers can expect to slightly less than two of its neighboring states, but more than the national average. 

Utah (UT): Average Closing Costs

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