Are you trying to figure out how much cash you will need to close on a home in Phoenix? You are not alone. Closing costs can be confusing, and they vary based on loan type, price point, and local customs. In this guide, you will learn what closing costs include, who typically pays what in Maricopa County, how much to budget, and smart ways to use credits and rate buydowns. Let’s dive in.
Closing costs explained
Closing costs are the fees and prepaid items needed to complete your home purchase or sale. For buyers, this includes lender charges, title and escrow fees, recording fees, and prepaids like property taxes and insurance. For sellers, it includes broker commissions, owner’s title insurance in many Arizona transactions, and prorations.
You will receive a Loan Estimate early in the process and a final Closing Disclosure at least three business days before signing. In Arizona, an escrow or title company manages funds, coordinates documents, and records with Maricopa County. Local custom influences who pays what, but many items are negotiable.
Who usually pays what
Common buyer-paid items
- Loan origination, underwriting, and application fees
- Appraisal and credit report
- Lender’s title insurance policy
- A share of escrow or closing fees
- Recording fees for the mortgage or deed of trust
- Prepaid interest, homeowner’s insurance, and property tax escrow
- HOA transfer or estoppel fees when applicable
- PMI setup if required, plus any inspections you order
Common seller-paid items
- Real estate broker commissions
- Owner’s title insurance policy in many Arizona transactions
- Recording and reconveyance fees to release existing loans
- Prorated property taxes and unpaid HOA assessments
- Seller concessions or credits if negotiated
Items often split or negotiated
- Escrow or closing fees
- Recording fee for the deed transfer
- Courier, wire, or document prep charges
How much to budget in Phoenix
For buyers using financing, a good planning range is about 2% to 5% of the purchase price. For sellers, total costs are often about 6% to 10% of the sales price when typical broker commissions are included. Your exact numbers depend on loan program, discount points, title rates, and prepaids.
Typical fee ranges
- Appraisal: $450 to $900
- Credit report: $25 to $50
- Escrow or closing fee: $300 to $900 total, often split
- Title insurance premiums: one-time, scale with price
- Recording fees: tens to low hundreds per document
- Courier or wire: $25 to $150 each
- HOA transfer/estoppel: $100 to $400 when applicable
- Prepaid insurance and property tax escrow: varies by property and timing
- Discount points: 1 point equals 1% of the loan amount
Sample Phoenix scenarios
- Entry-level home at $300,000: buyer about 2.5% or ≈ $7,500; seller about 5.5% or ≈ $16,500
- Mid-priced home at $500,000: buyer about 3% or ≈ $15,000; seller about 5.5% or ≈ $27,500
- Higher-priced home at $800,000: buyer about 3% or ≈ $24,000; seller about 5.5% or ≈ $44,000
These are planning estimates. Ask your lender and escrow/title team for current fee schedules and a detailed Loan Estimate or net sheet for your address and loan type.
Credits, concessions, and buydowns
Seller concessions
Seller concessions are credits from the seller that reduce your cash to close. They can be applied to lender fees, escrow items, prepaid taxes and insurance, or discount points. Loan programs set limits, and lenders must approve the credit amount. Conventional, FHA, and VA loans each have specific rules. Make sure the credit is written into the contract and reflected on your disclosures.
Rate buydown options
- Permanent buydown: You or the seller pay points upfront to lower your interest rate for the life of the loan. One point equals 1% of the loan amount.
- Temporary buydown: A 2-1 or 1-0 structure lowers your rate for the first year or two, then it reverts to the note rate. Funds are set aside and used to reduce your early payments.
Both options must follow lender and program rules. In a negotiation, a seller-paid buydown can improve affordability without changing the sales price.
Lender credits vs points
Lender credits reduce your closing costs in exchange for a higher interest rate. Points do the opposite, lowering the rate for an upfront cost. Tax treatment can vary, so it is wise to consult a tax professional.
Phoenix specifics to verify
- Owner’s title insurance: In many Arizona transactions, the seller pays for the owner’s policy. Confirm for your contract and title company.
- Escrow fee split: Some companies split evenly, others allocate differently. Verify early.
- Maricopa County recording: Fees are applied per document, and taxes are prorated at closing. Confirm current schedules with county offices.
- HOA fees: Ask about transfer or estoppel fees and unpaid assessments.
- Transfer taxes: Arizona does not have a statewide real estate transfer tax. Check for any unusual local levies.
Use the mortgage calculator like a pro
If you are estimating payments and cash to close, enter these items:
- Purchase price, down payment, interest rate, and loan term
- Loan program type if available
- Property tax estimate and annual homeowner’s insurance
- HOA dues if applicable
- Estimated closing costs as a dollar amount or a percent of price
- Any seller or lender credits, and any points for a buydown
Review the outputs for monthly principal and interest, total monthly payment including taxes, insurance, HOA, and your estimated cash to close. Use the sensitivity options to compare using credits versus buying points. Remember, this is an estimate. Your lender’s Loan Estimate and final Closing Disclosure will govern.
For a deeper walkthrough and checklists, use the Buyers Guide and the Sellers Guide on our site.
Ways to reduce cash to close
- Ask for seller credits or a temporary buydown when you write your offer, within loan-program limits.
- Compare lenders for rates, fees, and available credits.
- Time your closing date to manage prepaid interest and escrow deposits.
- Consider lender credits if you prefer lower upfront costs.
- Compare homeowner’s insurance quotes and verify HOA transfer fees.
- Request a title quote early and confirm who pays the owner’s policy.
Seller planning: understand your net
As a seller, your largest cost is often the total broker commission. Other items include the owner’s title insurance policy in many Arizona deals, escrow and recording fees tied to releasing your mortgage, prorated property taxes, HOA dues or assessments, and any concessions you agree to.
Ask your agent and escrow officer for a preliminary net sheet based on your price, payoff, and timing. If you plan to offer a credit or buydown to help buyers, model how that affects your net versus a price reduction. Knowing these numbers early helps you price confidently and negotiate from strength.
Timeline and disclosures
- Early in the process, your lender issues a Loan Estimate so you can compare costs.
- At least three business days before closing, you receive a Closing Disclosure with final figures.
- Your escrow or title company coordinates signing, collects funds, and records with Maricopa County.
- Always confirm wire instructions by phone with the escrow company to avoid fraud.
When you are ready to move forward, a clear estimate and a confident plan will make closing day smooth.
If you want local guidance tailored to your property and loan, connect with the team at Arizona Proper Real Estate. We will walk you through your numbers, coordinate with your lender and title team, and help you negotiate credits or buydowns that fit your goals.
FAQs
How much will I pay to close in Phoenix?
- Buyers commonly budget about 2% to 5% of the purchase price for closing costs, depending on loan type, points, title fees, and prepaids. Sellers often plan for about 6% to 10% when typical commissions are included.
Who pays for owner’s title insurance in Phoenix?
- In many Arizona transactions, the seller pays for the owner’s title policy by local custom, but this is negotiable. Confirm the allocation with your purchase contract and escrow company.
What are seller concessions and how do they work?
- Seller concessions are credits from the seller applied to the buyer’s closing costs, prepaids, or discount points. They must meet loan-program limits and appear on the Loan Estimate and Closing Disclosure.
Can the seller pay for a rate buydown?
- Yes, sellers can fund permanent or temporary buydowns if the lender and loan program permit it. The buydown must be documented and counted within any concession limits.
When will I get my Loan Estimate and Closing Disclosure?
- Your lender provides a Loan Estimate early after application, then a final Closing Disclosure at least three business days before signing so you can review all costs.
Are there real estate transfer taxes in Maricopa County?
- Arizona does not have a statewide real estate transfer tax. You should still verify any local recording fees and confirm your closing figures with the escrow company.
What does the mortgage calculator include and exclude?
- A good calculator shows principal and interest, taxes, insurance, HOA dues, and cash to close. It is an estimate and does not replace your lender’s official disclosures.
What should sellers budget beyond commissions?
- Common items include the owner’s title policy in many Arizona deals, escrow and recording fees, prorated taxes, HOA balances, mortgage payoff and reconveyance fees, and any concessions you offer.
