First-time home buyers are often surprised to find that they are on the hook for more than just their down payment when purchasing Las Vegas homes for sale. For these buyers, closing costs can come as an unwelcome last-minute surprise, and in some cases, coming up with the funds to pay them on short notice can be difficult. So how to avoid such a situation? Here's what you need to know to be clued in on closing costs, courtesy of our real estate agents.

What are closing costs?

Closing costs are fees associated with the home buying process. These fees are collected at closing, which is when buyers sit down to formally take possession of their new property, with title to the property legally transferred from seller to buyer. Getting to the closing table is a process that involves a number of services along the way, and fees paid at closing are distributed to those who provide those services.

What fees generally make up closing costs?

No two real estate transactions are exactly the same, so the fees that are collected as part of closing costs can differ significantly from one transaction to another. That being said, there are some fees that are common to many, if not most, transactions. These include:

• Mortgage-related fees – These typically include loan application fees, origination fees and underwriting fees and may also include prepaid interest and/or discount points should they be used to reduce the borrower's interest rate.

• Third-party fees – These fees commonly include payments for services like appraisals, home inspections, tax services, and credit checks, as well as costs associated with required insurance policies, such as mortgage and/or homeowner's insurance.

• Escrow account fees and funding – Escrow accounts are generally set up for homeowners who purchase their property with a mortgage loan to ensure that funds are available to keep property taxes, homeowner's insurance premiums, and homeowner's association dues paid in a timely fashion, protecting the lender's investment. Buyers generally pay fees for the set-up and funding of these accounts at closing.

Depending upon your particular location, type of mortgage loan, purchase contract terms, and other variables, you may also find that your closing costs include title search and/or title insurance fees, survey fees, flood determination/insurance fees, document preparation fees, recording fees, attorney fees, and state and local property transfer taxes, among many other possibilities.

How much can you expect to pay at closing?

According to NerdWallet, closing costs for real estate transactions average between 2 and 5 percent of the purchase price of a home. That means that if you're buying a home that costs $150,000, you can expect to pay anywhere between $3,000 and $7,500 in closing costs.

Staying in close contact with your lender throughout the home purchasing process is the only real way to know how much you will need to be prepared to pay at the closing table. You will be provided with an estimate of closing costs with your Loan Estimate document, which should be delivered to you within three business days once your loan application is completed. It is important to be aware that this estimate can be subject to change, and if there are changes, you should be provided with a revised estimate of your closing costs.

If you need more information on closing costs or any other aspect of the home-buying process, please feel free to contact Wardley Real Estate. Our agents will be happy to put their experience and expertise to work to help ease your path toward becoming a Las Vegas-area homeowner.