Who Pays for What When Buying or Selling a Home?
What Buyers Usually Pay
In Montana, buyers are generally responsible for costs related to financing and due diligence—aka making sure the home is solid, safe, and ready to go!
- Home Inspection – Usually optional but strongly recommended; paid out-of-pocket (often $300–$600+).
- Appraisal Fee – Required by lenders, usually $600–$800, sometimes more for rural or complex properties.
- Loan Origination & Processing Fees – Charged by the lender; varies, but can range from 0.5%–1% of the loan amount.
- Title Insurance (Lender’s Policy) – Buyer typically pays for the lender’s title policy (seller often pays for owner’s policy).
- Recording Fees – Charged by the county to record the deed and mortgage (typically a few hundred dollars).
- Survey or Property Corners (if needed) – Occasionally required, especially in rural or undeveloped areas.
- Homeowner’s Insurance Premium – Paid up front for the first year at closing.
- Escrow Prepaids – Includes taxes and insurance reserves; varies based on the time of year and property.
- Closing Fee / Escrow Fee – Often split between buyer and seller, but this can be negotiable.
- HOA Transfer Fees or Dues (if applicable) – Sometimes buyers pay a transfer fee to join the HOA.
LOCAL TIP: In Billings, attorney involvement isn't required, but many buyers hire one to review contracts and ensure smooth closings.
What Sellers Typically Pay
Sellers usually pay for items tied to transferring ownership and marketing the property.
- Owner’s Title Insurance Policy - Covers the buyer’s title insurance. Standard practice in Montana for the seller to pay.
- Real Estate Agent Commissions - Usually 5%–6% of the sale price, to be split between the listing and buyer’s agents.
- Title Company Closing Fees - Most often split between buyer and seller, but sometimes negotiated one way or the other.
- Document Preparation Fees - Includes things like the deed prep, handled by the title company (usually around $100–$150).
- Recording Fees for Deed - Typically paid by the seller to officially record the new deed with the county (minor cost, ~$10–$20).
- Outstanding Property Taxes & Assessments - Seller pays prorated taxes up to the closing date.
- HOA Dues or Transfer Fees (if applicable) - If the home is in an HOA, the seller often pays any transfer fee and prorated dues.
- Repairs or Concessions Agreed Upon During Negotiations - Could include repair costs, buyer’s closing costs, or a price reduction.
GOOD TO KNOW: Montana doesn’t charge a state or local transfer tax, which can save sellers thousands compared to other states.
Final Thoughts
Buying or selling a home in Billings is more affordable when it comes to extra fees—thanks in part to Montana’s no-transfer-tax policy. But every transaction is a little different, and these costs can shift depending on negotiations, lender requirements, and specific property needs.
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