Closing costs in North Carolina
How much will you need to fork out in closing costs when buying or selling a home in The Old North State?
Closing costs vary a lot by state. Depending on where you buy, you could pay as little as $1,500 or upwards of $67,000.
But in North Carolina, homebuyers pay an average of $2,802.91 for closing costs with taxes. That’s based on a typical home price of $266,118 and a 2020 survey from ClosingCorp that determined North Carolinians paid an average of 1.05% in closing costs for the year.
However, these are only estimates. How much you’ll pay depends on the home’s purchase price, your credit profile and whether you can get some concessions. Here’s a closer look at how closing costs in North Carolina work and where you can possibly negotiate and save.
Closing cost stats in North Carolina
Across the state, the average home sells for between $200,000 and $300,000. If you buy a property in that range, expect to pay between $1,868.61 and $4,204.37 in closing costs after taxes.
|Average home sale price||$200,000 to $300,000|
|Average total closing cost||$2,802.91|
|Expected closing cost range||$1,868.61 to $4,204.37|
|Percentage of closing cost to home sale price||0.93% to 1.4%|
How much does tax affect the closing cost?
Buyers and sellers in North Carolina pay an average of $542.28 in tax combined for the closing. This accounts for 19.35% of the total average closing cost in North Carolina.
Average closing costs in North Carolina
According to data from ClosingCorp, the average closing cost in North Carolina is 1.05% of a home’s purchase price with taxes. While this is a relatively small amount compared to other states, it can still run into the thousands for expensive homes.
What fees make up the closing cost?
Standard closing costs
- Recording fees
- Transfer tax
- Lender’s title policy
- Owner’s title policy
- Home inspection
- Settlement fees
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Who pays closing costs in North Carolina?
In North Carolina, closing costs are paid by both the buyer and seller. Your closing costs will vary depending on the home’s purchase price, the location and whether you’re paying in cash.
|Loan origination fee||.5% to %1 of the loan amount|
|Loan discount points (optional)||One point = 1% of the loan amount|
|Credit report fee||$30|
|Appraisal fee||$450 and up|
|Flood certification (if required)||$18|
|Title search||$300 and up|
|Lender’s title insurance||Approximately:|
|Termite report||$85 to $250|
|Home inspection||$300 and up|
|Land survey fee||$350 and up|
|Attorney and settlement fees||$700 and up|
|Recording fees — all documents except deed and encumbrances||$100|
|Postage and courier fees||$35|
|Homeowner’s insurance — 12 months prepaid at closing||$1,000 to $1,500|
|FHA loan upfront mortgage insurance premium (MIP) — if down payment is less than 20%||MIP = 1.75% of the FHA base loan amount|
|Prepaid daily interest charge — 15 days||$250|
|Escrow deposit for property taxes and homeowner’s insurance||$1,000 and up|
For the seller
|Real estate commission||Around 5.5% of sales price|
|Postage and courier fees||$35|
|Own attorney fees||Varies|
|Title search||$300 to $600|
|Homebuyer’s title insurance||$1000|
|Excise tax/revenue stamps||$2 for every $1,000 of the sales price|
|Document preparation||$150 to $300|
|Recording fees — deed and encumbrances||$100|
|Prorated property taxes||Varies|
|Mortgage payoff||Subject to loan balance|
|Transfer tax — seller typically pays this||$1 for every $500 of the sales price|
|Credits towards closing costs, if applicable||Varies|
|Escrow and closing fees||Varies|
How do closing costs in North Carolina compare nationally?
In 2021, the average closing cost in the US was $6,837 with taxes for a single-family home, placing North Carolina’s average closing cost of $2,242, well below the national average. It ranks 32nd out of 50 states for closing costs.
In North Carolina’s neighboring states of South Carolina, Tennessee and Virginia, average closing costs with taxes are $$3,269, $3,790 and $6,185, respectively.
How are closing costs paid?
For home purchases, closing costs must be paid at closing and can’t be rolled into your mortgage, as with a mortgage refinance. So be sure to budget these costs when you’re looking for a home.
Can I negotiate on my closing costs?
Yes, it’s possible to negotiate on closing costs. The best way is to compare lenders and use your loan disclosure as a negotiation tool. In today’s competitive marketplace, many lenders are willing to reduce or waive their closing costs to earn a customer, especially for good credit borrowers.
If you can’t negotiate lower closing costs with your lender, you can also:
- Ask the seller if they’re willing to cover a part or all of your closing costs. New home developers often are willing to do this.
- Ask the lender if you can “buy up” your interest rate in exchange for paying all or part of your closing costs, although you may end up paying more in the long run.
How can I avoid paying closing costs?
Some lenders offer no closing cost loans, but you’ll likely end up paying a higher interest rate for this type of product.
Closing costs in North Carolina vary depending on the county, the total sale amount, down payment and your credit profile. The good news is, it’s possible to minimize your closing costs by comparing title companies and attorneys.
Frequently asked questions
Do I need to hire an attorney for closing?
Yes. In the state of North Carolina, an attorney is required to close on your new home purchase. These fees typically range from $700 and up.
I’m paying in cash. Do I need to pay closing costs?
If you’re paying in cash, you might not need to cover these mortgage-related closing costs:
- Appraisal fee
- Inspection fee
- Title insurance
- Mortgage insurance
- Intangible tax on mortgage
While it’s possible to skirt around these costs, it’s not a good idea. Getting your home appraised and inspected and purchasing a homeowner’s title insurance policy can help you avoid costly problems down the road.
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