Buying a home in Richmond is exciting, but the final number you bring to closing can feel unclear. You want to budget with confidence and avoid last‑minute surprises. In this guide, you will learn what closing costs you can expect, who typically pays what in Metro Richmond, and simple ways to estimate your total out‑of‑pocket funds. Let’s dive in.
What Richmond buyers pay
As a Richmond‑area buyer, you should plan for about 2% to 5% of the purchase price in standard closing costs. This covers lender fees, title charges, inspections, appraisal, and recording. On top of that, prepaids and escrow reserves for taxes and insurance can add roughly 0.5% to 1.5% depending on when you close and local tax schedules.
Exact totals vary by your loan program, lender, property location, and negotiated contract terms. Your lender’s Loan Estimate and final Closing Disclosure will show your precise numbers.
Typical buyer line items
Down payment
- Your portion of the purchase price not financed. Not a closing cost, but the largest cash item at settlement.
Lender fees and origination
- Application, processing, underwriting, and any points you choose to buy.
- Typical range: about 0.5% to 1.5% of the loan amount for standard lender fees. Points are extra if purchased.
Appraisal
- Lender‑ordered valuation to confirm the home’s value.
- Typical range: $400 to $800. Often paid up front.
Credit report
- Fee for the lender’s credit pull.
- Typical range: $25 to $75.
Inspections
- You choose which to order. Common options include general home inspection, radon, wood‑destroying insect, and sewer scope.
- Typical range: general inspection often $300 to $600, specialized tests vary.
Lender’s title insurance
- Protects the lender’s lien and is required with a mortgage.
- Buyer typically pays for the lender’s policy. Cost depends on loan amount.
Recording and mortgage recording
- Local fees to record the deed and your mortgage.
- Buyer usually pays mortgage recording fees. Deed recording fees may be paid by the seller depending on local custom.
Prepaids and escrow reserves
- First year homeowner’s insurance, prepaid interest, initial escrow deposits for taxes and insurance, and property tax prorations.
- These can add several hundred to several thousand dollars depending on timing.
Private mortgage insurance upfront
- Some loans include an upfront PMI or initial premium, especially with less than 20% down on conventional, or different rules for FHA.
Survey if required
- Boundary or location survey when requested by your lender or desired for due diligence.
- Typical range: $300 to $1,000+ depending on lot or acreage.
Wire or certified funds
- Bank fees for wiring or cashier’s checks may apply. Always verify instructions by phone using known numbers to reduce fraud risk.
What sellers often cover locally
Customs vary across Richmond City, Henrico, Chesterfield, and Hanover, and every contract is negotiable. In many Richmond‑area transactions, sellers commonly pay:
Real estate commission
- Typically the largest seller expense. Commission is paid by the seller.
Transfer and grantor taxes
- Virginia charges state and local transfer or grantor taxes when a deed changes hands. These are commonly paid by the seller in our area, but confirm per contract and locality.
Owner’s title insurance
- Protects your ownership interest. In many Virginia closings, the seller often pays for the owner’s policy as a local custom. This can vary by deal, so confirm with your title company and contract.
Prorations and agreed credits
- Sellers pay their prorated share of property taxes and HOA dues through the closing date. Warranties, repairs, or credits are negotiable.
Fees that are negotiable
Settlement or closing fee
- Title or settlement company fee for handling the closing and preparing documents. In Virginia it may be paid by buyer, seller, or split. Confirm in your contract.
Courier and document prep
- Small administrative items that can be assigned to either party or split.
Seller concessions
- Your loan program sets limits on how much a seller can contribute toward your closing costs. FHA, VA, USDA, and conventional each have different rules. Ask your lender early so you know your cap before negotiating.
Quick estimate method
Use this simple framework to build an initial budget for Metro Richmond:
- Start with 3% of purchase price for standard costs.
- Add 1% for prepaids and escrow reserves unless you have exact insurance and tax numbers.
- Add fixed line items: appraisal about $500, inspection about $400, credit report about $50.
- Ask your lender for a Loan Estimate to capture origination, points, and third‑party charges.
- Subtract any expected seller credits in your contract.
- Add a $500 to $1,500 buffer for small surprises.
Example on a $350,000 home
- Standard closing costs at 3%: $10,500
- Prepaids and escrow at 1%: $3,500
- Appraisal, inspection, credit report: $1,000
- Estimated total at closing, excluding down payment: about $15,000
Remember, your earnest money deposit is credited back at closing and reduces the final amount you need to bring.
Virginia and Richmond specifics
Recording and transfer taxes
- Virginia uses state and local taxes when recording and transferring property. In Metro Richmond, it is common for sellers to pay transfer or grantor taxes, while buyers pay mortgage recording fees. Always confirm the current rates and allocations with your settlement agent.
Title insurance custom
- In many Virginia deals, sellers often pay the owner’s title policy, while buyers pay the lender’s policy. Your contract and title company will confirm how your transaction is set up.
Who conducts closings
- In Virginia, settlement can be handled by a title company, escrow company, or settlement attorney. Your lender and agent will help you choose and coordinate.
Closing Disclosure timing
- Under federal TRID rules, your lender must deliver the Closing Disclosure at least three business days before closing. If certain changes occur, the timeline may extend. Use that window to review and ask questions.
Wire safety and funding
- Wire fraud is a real risk. Verify wiring instructions by phone using a known, trusted number for the title company. Do not rely on emailed numbers or links. Ask whether certified funds are acceptable.
Prepaids and escrow basics
Prepaids and reserves are not fees in the traditional sense. They are funds collected in advance so your lender can pay your property taxes and insurance when due.
- Property tax prorations: You will pay your share from the closing date through the period end.
- Homeowner’s insurance: Most lenders require the first year premium paid at closing.
- Prepaid interest: Covers interest from funding through the end of that month.
- Initial escrow deposits: Funds placed into your escrow account for future tax and insurance bills.
Because these items depend on your closing date and the local tax cycle, the amounts can vary. Build them into your estimate so you are not surprised.
How to reduce cash to close
- Compare lenders: Origination and third‑party fees can vary. Getting an early Loan Estimate helps you evaluate options.
- Ask about credits: Some lenders offer lender credits in exchange for a slightly higher rate.
- Negotiate seller help: Within your loan program limits, you can request seller‑paid costs or a closing credit in your offer.
- Time your closing: A late‑month closing can reduce prepaid interest. Your agent and lender can help you weigh the trade‑offs.
Simple buyer checklist
- Ask your lender for a Loan Estimate when you apply.
- Request a preliminary feesheet from your title or settlement company.
- Confirm in writing who pays the owner’s title policy and transfer taxes.
- Verify property tax rates with the locality to estimate prorations.
- Schedule your inspection and appraisal early to lock in costs.
- Confirm wiring and acceptable funds for closing, and verify all instructions by phone.
What this means for you
If you are buying in Richmond City, Henrico, Chesterfield, or Hanover, plan for 2% to 5% in standard closing costs plus about 0.5% to 1.5% in prepaids. Clarify who pays the owner’s title policy and transfer taxes in your contract, and get your lender’s Loan Estimate early. With a clear plan and the right team, you can step into closing day confident and prepared.
If you want a tailored estimate for your price point and loan type, reach out to Dan Tulli to walk through your numbers and strategy.
FAQs
How much are buyer closing costs in Richmond?
- Expect about 2% to 5% of the purchase price for standard costs, plus roughly 0.5% to 1.5% for prepaids and escrow reserves.
Are closing costs the same as the down payment?
- No. Closing costs are fees and prepaids due at settlement. The down payment is separate and is the largest cash requirement for most buyers.
Can a seller pay my closing costs in Virginia?
- Yes, within your loan program’s limits and if negotiated in your contract. Ask your lender for the maximum allowable seller concessions.
Who usually pays owner’s title insurance in Richmond?
- In many Virginia transactions, the seller often pays the owner’s title policy, while the buyer pays the lender’s policy, but it is negotiable.
What are typical inspection and appraisal costs?
- General home inspections often run $300 to $600, and appraisals commonly range from $400 to $800, depending on property type.
When will I see my final numbers before closing?
- Your lender must provide the Closing Disclosure at least three business days before settlement, which gives you time to review and ask questions.
How do I avoid wire fraud when sending funds?
- Verify wiring instructions by calling your title company using a trusted phone number, never from an email link, and confirm details before sending any money.
