D.C. home buyers paid an average of $29,888 in closing costs including transfer taxes in 2021, far higher than the other most costly states such as Delaware ($17,859), New York ($16,849), Maryland ($14,721) and Washington ($13,927), according to the report.
When transfer taxes are excluded, D.C. still topped the list at $6,502, followed by New York ($6,168), Hawaii ($5,879), California ($5,665) and Massachusetts ($4,904).
How to choose a title company for your real estate closing
While the amount of closing costs paid was higher, the percentage of the purchase price was lower in 2021 at 1.81 percent compared with 1.85 percent in 2020. Closing cost calculations for this report include the lender’s title policy, owner’s title policy, appraisal fees, settlement costs, recording fees, land surveys and transfer taxes.
Closing costs vary by jurisdiction, with Delaware’s average of 5.4 percent the highest percentage of the purchase price by state in 2021. Colorado and Wyoming tied for the lowest percentage of the purchase price charged for closing costs at 0.7 percent. D.C.’s closing costs averaged 3.9 percent of the purchase price, which is among the highest percentages.
High-cost housing markets such as Hawaii and California had lower percentages, at 0.9 percent and 1 percent, respectively. That kept average closing costs lower, at $7,463 in Hawaii and $7,953 in California.
How to avoid real estate scams
States with the lowest closing costs including taxes were Missouri ($2,061), Indiana ($2,200), North Dakota ($2,501), Wyoming ($2,589) and Mississippi ($2,756).
When transfer taxes are excluded, the states with the lowest closing costs were Missouri ($2,061), Indiana ($2,200), Nebraska ($2,210), Arkansas ($2,281) and West Virginia ($2,465). Missouri and Indiana don’t impose real estate transfer taxes.