If you are buying or selling a home in Tempe, you are probably asking the same question most clients ask first: how much will you pay at closing, and what can you negotiate? You want a simple, local answer so you can plan your budget and avoid last‑minute surprises. In this guide, you will learn who typically pays which fees in Tempe, what the common ranges look like, and where you have room to negotiate so you keep more of your money. Let’s dive in.
What closing costs include in Tempe
Closing costs are the fees and prepaid items due when the sale is finalized. They cover services like escrow, title insurance, recording fees, loan charges, inspections, and prorations for property taxes or HOA dues. These costs are separate from a buyer’s down payment.
While some items follow local custom, many are negotiable in the purchase contract. Your totals also depend on loan type, purchase price, HOA status, and how the closing date affects prorations. As a general guide, buyers often spend about 2% to 5% of the price on closing costs, and sellers often spend about 6% to 10% when you include commission. Your exact numbers will depend on your deal and the vendors involved.
Who pays what in Tempe
Below is a Tempe and Maricopa County view of the most common line items and who typically pays. Keep in mind that you can often negotiate these in your purchase contract.
Real estate commissions (usually seller)
- What it covers: Listing and buyer agent compensation.
- Who pays: Typically the seller.
- Typical size: Commonly 5% to 6% of the sale price, set by the listing agreement. This is usually the largest single seller expense.
Owner’s title insurance policy (customarily seller in Arizona)
- What it covers: Protects the buyer’s ownership against covered title defects.
- Who pays: In Arizona, it is customary for the seller to pay for the owner’s policy, though it is negotiable.
- Typical cost: A one‑time premium based on the sale price. Expect several hundred to a few thousand dollars depending on price and the title company’s rate schedule.
Lender’s title policy and title-related loan charges (buyer)
- What it covers: Lender’s title insurance and title work required by the lender.
- Who pays: Typically the buyer when financing.
- Typical cost: Usually less than the owner’s policy, plus any loan‑related title charges.
Escrow or closing fees (often split)
- What it covers: Title/escrow company services for funds and document handling.
- Who pays: Commonly split 50/50 in Arizona, but negotiable in the contract.
- Typical cost: Often a few hundred dollars to around $1,000 per side depending on the company and complexity.
Recording fees and county fees (buyer or split)
- What it covers: Recording the deed and, if applicable, the mortgage with the Maricopa County Recorder.
- Who pays: Buyers often pay to record the mortgage; deed recording can be buyer or seller. This is negotiable and may be split.
- Typical cost: Modest line items, generally tens to low hundreds per document, based on the Recorder’s fee schedule.
Transfer tax (Arizona context)
- What it covers: A tax some states charge when property changes hands.
- Arizona note: Arizona does not have a statewide real estate transfer tax, and Maricopa County does not generally impose one. Always verify if a unique property has any special district fees.
Prorations for taxes, HOA dues, and utilities (split by date)
- What it covers: Property taxes, HOA assessments, and similar items are prorated based on the closing date.
- Who pays: Each party pays its portion for the time they owned or will own the property.
- Typical impact: Varies by the time of year, local tax rates, and HOA schedules.
Prepaid items for buyers
- What it covers: Prepaid homeowner’s insurance, prepaid mortgage interest from closing to your first payment, and your initial escrow deposits for taxes and insurance.
- Who pays: The buyer.
- Typical cost: Can range from several hundred to several thousand dollars depending on loan terms and property tax/insurance amounts.
Inspection, appraisal, and loan origination fees (usually buyer)
- Inspections: Often $300 to $700 depending on property size and scope.
- Appraisal: Often $400 to $800; typically required by the lender for financed purchases.
- Lender fees: Origination, underwriting, and credit report fees vary by lender. Some lenders offer “no‑origination” structures while others charge points.
HOA fees and transfer items (negotiable)
- What it covers: HOA estoppel or disclosure fees, unpaid dues payoffs, and transfer fees.
- Who pays: Often the seller pays estoppel/disclosure and any payoff of unpaid dues; transfer fees are negotiable.
- Typical cost: Varies widely by association. Budget anywhere from about $50 to several hundred dollars.
Seller concessions or credits (negotiable)
- What it covers: Credits toward buyer closing costs, repairs, or rate buydowns.
- Who pays: The seller if agreed in the contract.
- Typical range: Can be zero or up to several percent of the purchase price, subject to loan program limits.
Home warranty (often seller, optional)
- What it covers: A one‑year service contract for major systems and appliances.
- Who pays: Often the seller as a goodwill item, though it is optional and negotiable.
- Typical cost: About $300 to $700 depending on coverage.
Tempe and Maricopa County practices
Escrow-driven closings
Arizona uses title and escrow companies to handle closings. Both sides usually close with the same title/escrow company. It is customary for the seller to purchase the owner’s title insurance policy and for both parties to split escrow fees, though you can negotiate these terms in your contract.
County recording and property taxes
Recording fees in Maricopa County are based on the document type and page count, so they are usually modest line items. Property taxes are prorated at closing based on the date the sale records. Buyers who finance will typically fund an initial escrow deposit for property taxes and insurance at closing.
HOA communities in Tempe
Many Tempe condos and planned communities have HOAs. HOA estoppel letters, transfer fees, and any required reserves vary by association. Order HOA documents and estoppel information early so there are no delays.
Market conditions affect negotiations
In a seller’s market, you might see fewer seller credits and buyers taking on a larger share of closing costs. In a buyer’s market, sellers may offer concessions, rate buydowns, or cover a portion of buyer fees to help the deal come together. Tempe is part of a dynamic Phoenix metro, so terms can shift with inventory and demand.
Title insurance and escrow oversight
Title insurance providers are regulated at the state level. Escrow practices follow state statutes and regulated standards. For exact premium schedules and fee quotes, ask your title/escrow company for a written estimate based on the current rate filings and your specific transaction.
Example: Tempe closing cost breakdown
Here is a simple, hypothetical example for a Tempe home sale. Numbers are rounded for illustration. Your numbers will vary with loan, timing, and negotiated terms.
- Sale price: $450,000
- Buyer puts 20% down; financing 80%
- Total commission: 5.5% of sale price, paid by seller
- Escrow fees split 50/50
Seller example
- Commission at 5.5%: $24,750
- Owner’s title insurance policy: $1,200
- Seller share of escrow fee: $350
- Prorated property taxes: $500
- HOA estoppel/transfer: $200
- Home warranty (optional): $500
- Misc. seller items: $200
- Estimated seller total: about $27,700, roughly 6.2% of the sale price
Buyer example
- Lender fees/origination: $1,500
- Lender’s title policy and title-related loan charges: $700
- Appraisal: $550
- Home inspection: $450
- Prepaid homeowner’s insurance: $900
- Prepaid interest: $600
- Initial escrow deposit for taxes/insurance: $2,000
- Mortgage recording fee: $150
- Buyer share of escrow fee: $350
- Estimated buyer total at closing (not counting down payment): about $7,200
Notes on how this could change:
- If the buyer negotiates a 2% seller credit, the buyer’s out‑of‑pocket drops while the seller’s net proceeds fall by the same amount.
- If the lender requires a larger initial escrow or charges points, the buyer’s costs increase.
- Title premiums and escrow charges follow company fee schedules. Always request a line‑item estimate early in the process.
How to budget and avoid surprises
Use this quick checklist to dial in your numbers and protect your bottom line.
- Ask for early estimates. Request a preliminary Closing Disclosure (buyer) or a seller net sheet and draft settlement statement (seller) from the escrow/title company after your contract is accepted.
- Confirm who pays what. Decide in the contract who will pay the owner’s title policy, transfer items, and recording fees. Arizona custom has the seller paying the owner’s policy and both sides splitting escrow, but you can negotiate.
- Get lender numbers early. As a buyer, compare your Loan Estimate to your final Closing Disclosure. Watch for changes in lender fees, points, and required escrow deposits.
- Order HOA items early. Ask the HOA for estoppel or transfer fee amounts and turnaround times as soon as you open escrow. Delays here can push your closing.
- Plan for prorations. Closing timing affects tax and HOA prorations. Ask your agent and escrow officer to model different closing dates if you need to fine‑tune cash to close.
- Verify final statements. Review your Closing Disclosure (buyer) or final settlement statement (seller) for accuracy on prorations, payoffs, and fees before you sign.
Work with a Tempe-focused guide
Clear numbers reduce stress. A local team that closes Tempe and Phoenix metro homes every week will help you compare title quotes, spot negotiable items, and write clean, strategic offers that protect your budget. Whether you are a first‑time buyer in Tempe, moving up to a larger home, or selling and aiming for smooth, on‑time proceeds, you deserve calm, expert guidance.
If you are planning a move, let us help you map your closing costs, negotiate who pays what, and keep your timeline on track. Reach out to The Bray Team for a tailored plan and a friendly, fast response.
FAQs
Who typically pays the owner’s title insurance in Tempe?
- In Arizona, the seller customarily pays for the owner’s title policy, though the contract can specify a different arrangement.
Are Maricopa County recording fees expensive?
- No. Recording fees are usually modest and depend on document type and page count. Your escrow officer can estimate the deed and mortgage recording amounts.
Is there a real estate transfer tax in Tempe or Maricopa County?
- Arizona does not have a statewide real estate transfer tax, and Maricopa County does not generally impose one. Always verify for any special district charges.
Can a Tempe seller pay a buyer’s closing costs?
- Yes. Seller credits or concessions are negotiable, with limits set by the buyer’s loan program. Credits can lower the buyer’s cash to close.
When will buyers and sellers see exact closing cost amounts?
- Buyers receive a Closing Disclosure at least three business days before closing, and sellers receive a settlement statement prior to signing so both sides can confirm final figures.
