Some of the most common closing costs are:

• appraisal fees: payment for the legal appraisal that determines a home's fair market value and substantiates the need for a loan of a certain size. In some markets, lenders are requiring two independent appraisals.
• credit report fee: pays for the buyer's verified credit report
• document preparation fees: pay for preparing all documents associated with the transaction
• escrow fees: are charged to process the paperwork associated with the home purchase and with keeping the money in a safe place during the sometimes lengthy transaction process
• flood insurance: varies with level of risk and may not be required
• homeowners insurance: required by the lender, this protects the homeowner from "casualty" (losses or damage to the home or personal property) and from "liability" (damages to other people or property)
• legal fees: There are certain legal fees associated with a real estate transaction. Because so many legal forms are boilerplate, these fees are kept to a minimum.
• notary: a notary is someone that legally verifies the homebuyer's identity
• origination fees: are paid to the lender [or broker] for evaluating, preparing, and submitting a proposed mortgage loan
• pest inspection fee: are sometimes waived, especially if a house is brand new
• private mortgage insurance: also known as PMI, this insurance is required of homebuyers that are unable to come up with a down payment of adequate size (typically, 20 percent or more)
• property taxes: depending on when the purchase actually closes, the buyer may owe the previous owners for taxes that they've already paid in that calendar year
• survey fees: often waived if an existing survey can be used
• tax service fees: ensure property taxes are paid each year
• title insurance: verifies that the seller officially owns the home

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