Are closing costs catching you off guard as you plan a move on the Eastern Shore? You are not alone. Buyers and sellers in Baldwin County often know their price but not the extra line items that show up at the closing table. In this guide, you will learn what closing costs include, who typically pays what in our area, how much to budget, and the local details that can shift your bottom line. Let’s dive in.
What closing costs cover
Closing costs are one-time fees and prorations you pay in addition to the purchase price. They include lender charges for financed buyers, third-party fees like title and recording, and prorated items such as property taxes and HOA dues.
Typical components include:
- Lender fees, appraisal, credit report, and underwriting for financed buyers
- Title search, title insurance, and settlement or closing fee
- Recording fees for deed and mortgage
- Survey and inspections if required
- Prepaid homeowner’s insurance and property tax escrows
- Prorated property taxes and HOA dues
Exact items and amounts vary by property, loan program, and local custom. A local net sheet or Loan Estimate is the best way to pin down your numbers.
Who typically pays what
Customs can vary by county and by deal. Negotiation plays a big role, and loan rules set limits on what a seller can pay for a buyer.
Buyer side basics
Buyers commonly cover lender-related costs and several third-party items:
- Loan origination and lender fees, often 0.5% to 1.5% of the loan amount
- Appraisal, typically $400 to $900
- Credit report and underwriting or processing fees
- Lender’s title insurance policy and title search
- Home inspection, usually $300 to $700 for a standard home, plus any specialty inspections
- Survey if required
- Recording fees for the mortgage
- Prepaid insurance and property tax escrows
- Settlement or closing fee
Financed buyers usually budget about 2% to 5% of the purchase price for closing costs, not including the down payment.
Seller side basics
Sellers typically cover costs tied to transferring clear title and compensating brokers:
- Real estate broker commission, commonly about 5% to 6% of the sale price in many markets, split between listing and buyer brokers
- Payoff of existing mortgage(s) and any related fees
- Owner’s title insurance policy where local custom assigns it to the seller, which you should verify for Baldwin County
- Prorated property taxes and HOA dues for the days the seller owned the home
- Settlement or closing fee, depending on local custom or negotiation
- Any agreed seller concessions toward the buyer’s costs
Including commission, sellers often see total costs around 6% to 10% of the sale price. Without commission, seller costs are much lower and mostly tied to title work, prorations, and payoffs.
How much to budget in Baldwin County
Financed buyers
A common planning range is 2% to 5% of the purchase price. On a $300,000 home, that is roughly $6,000 to $15,000 in closing costs, plus your down payment. Your exact number depends on lender fees, rate points, title premiums, insurance, and whether you negotiate seller concessions.
Cash buyers
Cash buyers avoid lender fees and many prepaids, but still pay title, recording, survey, and prorations. A planning range is about 0.5% to 1.5% of the purchase price, depending on title insurance and recording charges.
Loan program rules and seller concessions
Seller-paid costs are limited by the loan program. These limits shape negotiations and your out-of-pocket total.
- FHA loans generally allow seller concessions up to 6% of the sale price for certain costs
- VA loans allow sellers to pay certain buyer costs and concessions, subject to VA rules and combined limits
- Conventional loans set contribution limits based on your down payment and occupancy, often in the 3% to 6% range
Ask your lender for your program’s current limits and which items qualify. You can then structure an offer that fits both the market and your loan.
Baldwin County details to verify
Local practices influence who pays what and how items are calculated. These details can move your net by thousands of dollars.
Recording and filing
Deed and mortgage recording fees are set by the Baldwin County Probate Office. Fees are typically per page plus filing and indexing charges. Ask your title company or the Probate Office for a current, itemized fee list.
Property taxes and proration
Property taxes are based on assessed value and local millage from city, county, school, and special districts. At closing, taxes are prorated based on the billing calendar and what has already been paid. Confirm the property tax year, whether taxes are current or prorated, and how unpaid taxes are handled with the title company or the Baldwin County Revenue Commissioner’s office.
Title insurance custom
In some Alabama counties the seller commonly pays the owner’s title policy, while in others the buyer does. Baldwin County practices can vary by area. Ask your agent or closing professional what is customary for your property type and request a title premium quote for your exact price.
Transfer or documentary taxes
Alabama does not generally impose a statewide real estate transfer tax like some states. Confirm with your title company whether any county-level transfer or documentary fees apply in Baldwin County.
Flood and coastal insurance
Parts of Baldwin County are coastal. Flood insurance requirements, wind or hurricane deductibles, and floodplain documentation can affect underwriting and escrow prepaids. Order a flood determination early and get insurance quotes before you finalize your numbers.
HOA and condo fees
Many communities, including coastal condos and golf communities, charge HOA transfer or estoppel fees. Some neighborhoods require a capital contribution at closing. Ask for the HOA fee schedule and any capital contribution requirements up front.
Who handles your closing
Closings here may be handled by a title company or a closing attorney. Fees and process can differ. Confirm who is handling your file and request a written closing fee schedule.
How to get accurate numbers
For buyers
- Get quotes from at least two lenders and compare fees, points, and rates
- Ask your chosen lender for a Loan Estimate and later a preliminary Closing Disclosure
- Request title insurance quotes and an itemized third-party fee estimate from the title company
- Price insurance early, including wind and flood if applicable
- Ask your agent to review an estimate of property tax proration and HOA charges
For sellers
- Ask your listing agent for a seller net sheet with scenario analysis at likely sale prices
- Include mortgage payoff estimates, commission, title charges, and prorations
- Verify whether you will pay for the owner’s title policy in Baldwin County and request a premium quote
- Confirm HOA transfer or payoff fees and any assessments
- Decide in advance whether you will offer buyer concessions and how that affects your net
Ways to reduce out of pocket
- Shop lenders to reduce fees and find the best rate and points mix
- Request seller concessions within your loan program’s limits
- Roll allowable costs into the loan if your lender and qualification allow
- Time your closing date to minimize prepaid interest and match your tax proration preferences
- For sellers, address likely inspection items early to avoid last-minute credits
Common pitfalls to avoid
- Skimming your Closing Disclosure. You should review it carefully at least three business days before closing
- Exceeding seller concession limits, which can trigger loan issues
- Underestimating coastal insurance costs that increase escrow requirements
- Misunderstanding property tax timing and proration in Baldwin County
- Falling for wire fraud. Always verify wiring instructions by phone using a trusted number from your title company
Quick ballpark examples
These illustrations use common ranges. Always rely on a Baldwin County net sheet and lender estimates for your exact numbers.
Example A, $300,000 purchase with financing
- Buyer closing costs estimate: 2% to 4% or about $6,000 to $12,000
- Seller closing costs estimate with a 5.5% total commission: roughly 6% to 9% or about $18,000 to $27,000
Example B, $500,000 purchase with cash
- Buyer closing costs estimate: 0.5% to 1.5% or about $2,500 to $7,500
- Seller closing costs estimate with a 5.5% total commission: roughly 6% to 9% or about $30,000 to $45,000
Local guidance you can trust
Closing costs are not one size fits all, especially in a coastal county with varied neighborhoods like Daphne, Fairhope, Spanish Fort, Montrose, and Olde Towne. A clear plan starts with local quotes and a tailored net sheet. If you want calm, informed guidance from a team that handles first-time purchases and complex Eastern Shore sales, reach out to Bo Nichols. We will help you estimate with confidence and negotiate smartly.
FAQs
What are closing costs vs down payment vs earnest money in Baldwin County?
- Closing costs are fees and prorations at closing, the down payment is your equity contribution, and earnest money is a good faith deposit credited to you at closing.
Can a seller in Baldwin County pay a buyer’s closing costs?
- Yes, seller concessions are common and must follow loan program limits such as FHA, VA, or conventional rules.
How do coastal insurance requirements affect closing costs near Daphne and Fairhope?
- Flood and wind coverage can increase prepaids and escrow amounts, so get quotes early to avoid surprises.
Who usually pays for the owner’s title insurance in Baldwin County?
- It varies by local custom and negotiation, so confirm with your title company and build it into your estimate.
How soon will I see my final numbers before closing?
- Most buyers receive a final Closing Disclosure at least three business days before closing, which you should review carefully.
Do we have a real estate transfer tax in Baldwin County?
- Alabama generally does not have a statewide transfer tax like some states, but verify any county-level fees with your title company.
What should I do first to estimate my closing costs?
- Ask your lender for a Loan Estimate and your agent or title company for a local net sheet that includes recording, title, taxes, and HOA fees.
