Then the lender hands over a Loan Estimate, and suddenly there's a second price tag attached to your dream home.
Closing costs usually run between 2% and 6% of the purchase price, according to mortgage data tracked by lenders and consumer agencies.
On a $400,000 home, that's roughly $8,000 to $24,000 due at signing — money that rarely shows up in the Zillow listing.
There's the appraisal fee (typically $300 to $500), a home inspection ($300 to $600), title search and insurance (often $1,000 or more), and lender origination fees that can stretch into the thousands.
Add in recording fees, credit report pulls, and prepaid items like property taxes and homeowners insurance, and the stack adds up fast.
The tricky part is that closing costs aren't one lump sum — they're a mix of fixed fees, percentage-based charges, and prepaid expenses that vary by state and county.
Some items, like the appraisal and credit check, are basically non-negotiable.
Others, like origination fees and title insurance, can sometimes be negotiated or shopped around.
The Consumer Financial Protection Bureau recommends comparing at least three Loan Estimates side by side, since lenders format them the same way on purpose.
One line item that catches many buyers off guard: prepaid interest and escrow setup.
If you close mid-month, you'll owe daily interest from your closing date to the end of that month, plus several months of property taxes and insurance tucked into an escrow account upfront.
That's why two buyers with identical loans can show up to closing with very different checks.
First-time buyers have some relief options worth asking about.
FHA loans allow seller concessions of up to 6% of the purchase price to help cover closing costs, and some conventional loans permit similar arrangements.
Down payment assistance programs in many states also cover a portion of closing fees for qualifying buyers.
The key is asking your lender early — not the week before signing.
A Government Accountability Office report flagged that some title companies charge for services that were never actually performed, and unclear fee descriptions make it hard to catch.
Ask for an itemized list and question anything labeled "processing," "courier," or "administrative" without a clear explanation.
Legitimate fees should come with a specific service attached.
Real estate commissions, transfer taxes, and prorated property taxes often come out of the seller's proceeds, which is why some listings advertise "seller pays closing costs" as a bargaining chip.
In a slower market, that concession becomes a real negotiating tool — and buyers who ask for it often get it.
The bottom line: budget for closing costs from day one, not after you fall in love with a house.
Get a Loan Estimate from multiple lenders, ask what's negotiable, and never sign a settlement statement you don't understand.
Final Thoughts
A few hours of comparison shopping can save thousands — and that's money that stays in your pocket long after the keys change hands.