You have your eye on a Phoenix home, but what will it actually cost to close the deal? Closing costs can feel like a moving target, especially if you are buying here for the first time. The good news is that once you know the common fees and who typically pays what in Arizona, you can plan with confidence and avoid surprises. This guide breaks down typical Phoenix closing costs, timelines, and smart questions to ask so you can budget clearly and negotiate well. Let’s dive in.
What are closing costs?
Closing costs are the one-time fees and prepayments due when you finalize your purchase. They are separate from your down payment. You will see them itemized on your Loan Estimate and then again on your final Closing Disclosure.
Most buyers pay for lender-related fees, title and escrow services, prepaid items like insurance and interest, inspections, and any association-related charges. Exact amounts vary by loan type, lender pricing, and property specifics.
How much do Phoenix buyers pay?
As a simple rule of thumb, buyers often pay about 2%–5% of the purchase price in closing costs, not including your down payment. Phoenix and the broader Arizona market typically fall within this range.
On a $400,000 home, that rough estimate is about $8,000–$20,000. You will also budget for prepaid items such as your first year of homeowners insurance, initial escrow deposits for taxes and insurance, and prepaid interest based on your closing date.
Buyer closing costs, line by line
Lender fees
- Origination or lender admin fee. Covers loan processing and underwriting. This may be a percentage of the loan or a flat fee.
- Discount points. Optional; each point equals 1% of the loan amount and can lower your interest rate.
- Appraisal. Typical Phoenix range is about $400–$800, depending on property type and complexity.
- Credit report. Often $30–$60.
- Processing and underwriting. Combined, these often range $400–$1,500, depending on the lender.
- Program-specific premiums. FHA, VA, and USDA loans can include up-front mortgage insurance or a funding fee.
Title and escrow services
- Lender’s title insurance policy. Generally paid by the buyer when financing. This one-time premium protects the lender.
- Owner’s title insurance policy. In many Arizona transactions the seller often pays this, but it is negotiable in the purchase contract.
- Escrow or settlement fee. Commonly split 50/50 between buyer and seller in Arizona, but it can be negotiated.
- Title search and recording. Buyers typically pay to record their mortgage or Deed of Trust and related documents.
Prepaids and impounds
- Prepaid interest. Charged from your closing date to the start of your first payment. It depends on the day you close.
- Homeowners insurance. Most lenders require you to pay the first year’s premium at closing.
- Escrow account deposits. Lenders often collect a few months of property tax and insurance to fund your impound account.
- Property taxes. Prorated at closing in Maricopa County based on the closing date and the local tax calendar.
HOA and condo items
- Resale or disclosure package. Many Phoenix-area associations charge for preparing a resale packet. Typical fees often range $100–$400, though amounts vary.
- Transfer, application, or capital contribution fees. Responsibility depends on your contract and the community’s rules.
- Prorated dues. Dues are prorated to the closing date and credited to the buyer or seller as appropriate.
Other common items
- Inspections. Buyers usually pay. A general home inspection often runs $300–$700; specialty inspections vary.
- Recording and courier or wire fees. Small administrative costs handled through the title and escrow process.
- Home warranty. Optional; sometimes a seller concession, or you can purchase one for a few hundred dollars.
Who pays what in Arizona
- Owner’s title policy. The seller often pays for the owner’s policy in Arizona, though this is negotiable.
- Lender’s title policy. Typically paid by the buyer when financing.
- Escrow fees. Commonly split between buyer and seller, but terms can be negotiated.
- Recording fees. Buyers usually pay for recording their new loan documents. Sellers typically handle reconveyance of any existing loan.
- HOA resale and transfer fees. Practices vary. Sellers often provide the resale disclosure packet, but fees can be negotiated or split.
- Real estate commission. Paid by the seller in most residential transactions. This is not a buyer closing cost.
- Taxes and transfer items. Property taxes are prorated at closing. Arizona generally has minimal transfer taxes, while county recording fees apply.
You can also negotiate seller concessions to cover part of your closing costs. Lender and loan program limits apply, so confirm what is allowed for your loan type.
Estimate your cash to close
Use this simple framework to build your budget:
- Step A: Estimate 2%–5% of the purchase price for closing costs. On $400,000, that is about $8,000–$20,000.
- Step B: Add prepaid items. Include your first year of homeowners insurance, prepaid interest, and initial escrow deposits for taxes and insurance.
- Step C: Add inspections, the appraisal, and any HOA resale or transfer fees.
- Step D: Ask your lender for a Loan Estimate and your title company for a preliminary settlement statement that shows who pays what.
Ways to reduce your costs
- Compare lender options. Ask for a side-by-side quote for no points versus paying 1 point, and clarify which fees are refundable.
- Request seller concessions. Depending on the market and loan program, the seller may agree to cover part of your costs.
- Understand prepaids. Since prepaid interest depends on your closing date, discuss timing and cash-to-close with your lender.
- Confirm title and escrow splits. Verify who pays the owner’s policy, lender’s policy, escrow fees, and recording charges for your specific contract.
- Clarify HOA items early. Know who pays for the resale packet and any transfer or capital contribution fees.
Timeline and what to expect
- Apply for your mortgage early. Your lender must provide a Loan Estimate within three business days of application.
- Order inspections shortly after acceptance. This keeps your due diligence timeline on track.
- Review your Closing Disclosure. You will receive it at least three business days before closing. Use it to verify your final cash-to-close.
- Allow time for HOA paperwork. Some associations take several days to prepare the resale package.
Smart questions to ask
Ask your lender
- Please provide a Loan Estimate. Which fees are refundable, and what are my costs with no points versus 1 point?
- What is my estimated prepaid interest and the required initial escrow deposit for taxes and insurance?
- How many months of taxes and insurance do you require in my escrow account?
Ask the title or escrow company
- Can you provide an itemized preliminary settlement statement that shows buyer versus seller charges for this property and loan amount?
- Who is expected to pay the owner’s and lender’s title policies, escrow fees, and recording fees for this county?
- How long will the HOA resale or transfer package take, and what is the estimated cost for this community?
Ask your agent or the seller
- Are seller concessions available to help with my closing costs, and what is customary under current market conditions and my loan program?
- Who is expected to pay the HOA resale disclosure fee and any transfer or capital contribution fees for this property?
Your Phoenix advantage
With clear estimates and the right questions, you can move from offer to keys without last-minute surprises. If you want a local, hands-on partner to guide your budgeting, negotiate concessions, and coordinate title, escrow, and HOA items, connect with MCK Partners. We are ready to help you close with confidence.
FAQs
How much should Phoenix buyers save for closing costs?
- Plan on roughly 2%–5% of the purchase price, plus funds for prepaid insurance, escrow deposits, inspections, and the appraisal. Ask your lender for a Loan Estimate early.
Who usually pays the owner’s title policy in Arizona?
- The seller often pays for the owner’s title policy in Arizona, while the buyer pays the lender’s policy. This is negotiable and set by the purchase contract.
Are HOA resale and transfer fees a surprise cost in Phoenix?
- Many communities charge a resale or transfer fee, and who pays varies. Ask about the HOA disclosure early to estimate the cost; typical fees vary by association.
Can the seller help pay my closing costs?
- Yes. Seller concessions are a common negotiation point, subject to your loan program’s limits. Confirm the allowable amount with your lender.
How do I verify that my closing costs are accurate?
- Compare your Loan Estimate to the Closing Disclosure and request a preliminary settlement statement from the title company. Ask for explanations of any unexpected differences.
