Alabama Real Estate Closing Costs Statistics (2024 Survey)
A new RealEstateBees.com survey of over 1,000 active real estate professionals found average closing costs for sellers and buyers in Alabama.
We reached out to over 1,000 active real estate professionals from Alabama to collect their insight on the real estate closing costs across the state.
The results are part of the large-scale survey—Nationwide Real Estate Closing Costs Index—conducted by the Real Estate Bees, a leading online real estate platform.
What Is Included in Closing Costs for a Seller in Alabama?
Costs included in seller’s closing costs most commonly across Alabama.
What Are Average Closing Costs for a Seller in Alabama When Selling with a Realtor?
The most common amounts of seller’s closing costs across the state of Alabama in an agent-assisted sale.
What Are Average Closing Costs for a Seller in Alabama When Selling 'by Owner'?
The most common amounts of seller’s closing costs across the state of Alabama in a FSBO sale.
How to Reduce Closing Costs for a Seller in Alabama?
The main way would be if their realtor offered to reduce their Alabama real estate brokerage‘s commission, but this usually must be approved ahead of time by the realtor’s qualifying broker.
I have done this before for relatives or repeat clients.
Can a Seller Avoid Paying Closing Costs in Alabama?
Even if a seller were to sell by owner, he or she would still have their portion of some of the closing costs, such as the prorated property taxes, prorated HOA fees, and a portion of the Alabama real estate attorney’s legal fees.
According to the latest data, 86% of home sellers work with an Alabama realtor to sell their home, 10% sell via FSBO, and 1% sell via iBuyer.
History shows that one of the benefits of using a realtor is that sellers end up selling their house for more.
The only thing I can think of is for the seller to borrow the money, or ask a relative to help cover them.
Once they receive the proceeds from the sale of the house, they can pay their debt.
I’m not sure why the seller wouldn’t be able to pay their portion of the closing cost because that comes out of the funds they receive for selling the home.
What Is Included in Closing Costs for a Buyer in Alabama?
Costs included in buyer’s closing costs most commonly across the state of Alabama.
What Are Average Closing Costs for a Buyer in Alabama When Buying with a Realtor?
The most common amounts of buyer’s closing costs across the state of Alabama in an agent-assisted sale.
What Are Average Closing Costs for a Buyer in Alabama When Buying Without a Realtor?
The most common amounts of buyer’s closing costs across the state of Alabama in a FSBO sale.
What Are Average Closing Costs for a Cash Buyer in Alabama When Buying with a Realtor?
The most common amounts of closing costs paid by Alabama cash home buyers in an agent-assisted sale.
What Are Average Closing Costs for a First-Time Buyer in Alabama When Buying with a Realtor?
The most common amounts of a first-time home buyer’s closing costs across the state of Alabama in an agent-assisted sale.
How to Reduce Closing Costs for a Buyer in Alabama?
The best way for a buyer to try to reduce their closing costs is to meet with at least 3 Alabama real estate lenders to review the loan estimates carefully and discuss the closing costs/prepaid expenses.
Also, if a buyer can make a larger down payment, that will usually help them receive a better interest rate.
Another way is for the buyer to request that the seller contribute to their closing costs.
If there is not an issue with appraisal from the Alabama property appraiser, the buyer can try to increase the purchase price of the home and roll the closing costs into the loan.
One way the buyer can reduce closing costs is to ask the seller to contribute towards their total settlement charges.
How to Negotiate Closing Costs With a Seller in Alabama?
The best way is to make a great offer and then the seller will be more apt to contribute to a buyer’s closing costs.
Can a Buyer Avoid Paying Closing Costs in Alabama?
No, not unless the seller agrees to cover them for him or her. A cash buyer in Alabama will pay the least in closing costs because there are no lender fees.
Are There Closing Costs Assistance Programs Available for Buyers in Alabama?
Some lenders “may” offer assistance programs, but these programs change constantly, so the person who wants to buy real estate in Alabama will need to research and talk to a variety of lenders to determine if they qualify.
Usually there are programs available to assist with closing costs, but they are typically for first-time homebuyers.
Who Pays Closing Costs in a Conventional Sale in Alabama?
Who Pays Closing Costs in a Cash Sale in Alabama?
Are Closing Costs Negotiable in Alabama?
What Are the Available Ways to Pay Closing Costs in Alabama?
Why Are Closing Costs So High in Alabama?
I don’t consider closing costs high. It’s just the price you pay if you would like to own a home.
Either you pay the price and enjoy the benefits of owning a home, or continue to rent and see how much money you’ll throw away over time.
The majority of the closing costs for a buyer are the lender and loan fees required to obtain a loan. My cash buyers pay significantly less in closing costs.
Closing costs in Alabama are usually high because of lender fees.
Who Pays Closing Costs in a Divorce in Alabama?
In Alabama, and every other state I can think of off the top of my head, closing costs are generally negotiated as part of the sales contract between the buyer and sellers.
While splitting these costs between buyer and seller is common, it can be completely negotiated.
For a couple divorcing, the costs don’t really change nor impact either person other than impacting their net proceeds from the sale.
As closing costs are paid during the closing transaction, these are not bills paid later.
The costs are deducted from the money paid for the home, and the remaining money is then distributed to each of the couple as agreed in the divorce or as ordered by the court.
Any seller, whether divorcing or not, can negotiate that the buyer pay closing costs. This may change the agreed upon sales price and may not change the net proceeds (money the sellers have after the sale).
Closing costs are not impacted by a divorce unless either or both parties create legal problems that complicate a successful sales transaction.
But that would be rare and, in that case, the house likely will never make it to market or to a legally binding sales contract.
The real challenge I see is if the couple cannot agree on the sales price or how to negotiate closing costs with their buyers, either could make it extremely difficult to sell the property.
In other words, they could make the sale of the property cost more, but it is not a change to the closing costs.
What Are the Transfer Taxes in Closing Costs in Alabama?
In Alabama, the transfer taxes in real estate closing costs are known as documentary stamp taxes. These taxes are levied on the sale or transfer of real property within the state.
The rate for documentary stamp taxes in Alabama is $0.50 for every $500 of the sales price or value of the property being transferred. This means that for every $500 increment, the transfer tax is $0.50.
For example, if the property is sold for $200,000, the transfer tax would be calculated as follows: $200,000 divided by $500 equals 400, multiplied by $0.50 equals a transfer tax of $400.
Who Pays Transfer Taxes in Closing Costs in Alabama?
The responsibility for paying transfer taxes in real estate closing costs typically falls on the buyer.
However, it’s important to note that the allocation of these costs can be negotiated between the buyer and seller as part of the purchase agreement.
While it is customary for the buyer to assume the transfer tax burden, it ultimately depends on the terms agreed upon during the transaction.
It is not uncommon for buyers and sellers to negotiate and divide the closing costs, including transfer taxes, based on their specific circumstances and preferences.
Therefore, the buyer and seller should discuss and determine the allocation of transfer taxes during the negotiation process and clearly outline it in the purchase agreement to avoid any misunderstandings or disputes.