Confused about who pays what at closing in Madison? You are not alone. Whether you are buying or selling, the final numbers can feel like a moving target. This guide breaks down typical Dane County closing costs, who usually pays each item, realistic ranges you can plan around, and how to get exact figures before you sign. Let’s dive in.
What closing costs cover in Dane County
Closing costs are the one-time fees and prepaids due when you transfer ownership. In Dane County, they usually include:
- Title insurance and closing services
- Lender-related fees for buyers
- Inspections and reports
- Recording and deed fees
- Prepaid items like insurance, property taxes, and interest
- Seller-side expenses such as commissions and loan payoffs
Exact amounts vary by price, loan type, and the title company you use. Local practices also influence who pays which items, so confirm early in your contract process.
Who typically pays in Madison-area deals
While every contract is negotiable, here is the common pattern across Madison and surrounding communities:
Buyer typically pays:
- Loan origination, underwriting, appraisal, and lender-required processing fees
- Lender’s title insurance policy
- Inspections and tests
- Recording fees tied to the buyer’s mortgage
- Prepaid homeowners insurance, prepaid interest, and initial escrow deposits
Seller typically pays:
- Real estate commissions
- Payoff of mortgages, liens, and association balances
- Often the owner’s title insurance policy in many Midwestern markets, though this can vary in Dane County
- Any seller credits negotiated in the offer
Negotiable items:
- Settlement/closing fee, deed recording, and how title fees are split. These frequently vary by title company and contract terms.
Customs shift by neighborhood, price point, and market conditions. Your best move is to confirm current practice with your agent and the title company before you finalize an offer.
Buyer costs: typical items and ranges
Lender and loan-related
- Loan origination/underwriting/processing: commonly 0.25% to 1.0% of the loan amount. Some lenders quote flat fees or points to lower your rate.
- Appraisal: typically $400 to $800, higher for complex properties.
- Credit report, flood certification, tax service, and similar small fees: usually $100 to $500 combined.
- Prepaid interest: depends on your loan amount, rate, and the day in the month you close.
- Mortgage insurance and escrow reserves: if required for your loan type, the lender may collect the first year of homeowners insurance and a few months of escrow.
Title and closing/escrow
- Lender’s title insurance policy: buyer usually pays; cost depends on loan amount and is often a few hundred to over a thousand dollars.
- Title search, exam, and settlement fee: often $300 to $900 combined. Who pays or splits this is negotiable.
- Owner’s title insurance policy: sometimes paid by seller locally, but confirm early. Premiums scale with price and can run from several hundred to a few thousand dollars.
Inspections and reports
- Home inspection: typically $300 to $600.
- Radon test, pest inspection, sewer scope, septic, well, or survey: plan for $100 to $1,000+ depending on which tests are needed.
Recording and local government fees
- Recording fees: set at the county level and generally modest, usually tens to a few hundred dollars in total depending on the number of documents.
- Transfer taxes or stamps: practices vary in Wisconsin. Confirm any transfer charges for the specific property with your title company or the Dane County Register of Deeds.
Prepaids and escrows
- Homeowners insurance: many lenders collect the first year at closing.
- Property tax escrow: lenders often collect 1 to 2 months upfront, depending on timing.
- Prepaid interest: accrues from your closing date until your first payment.
Miscellaneous
- Courier, wire, notary, and document prep: usually $25 to $200 total.
Key point: Buyers must receive a final Closing Disclosure at least 3 business days before closing. Review it line by line and ask your lender to explain any changes.
Seller costs: what to expect
Commission
Commission is typically the largest seller expense and is set by your listing agreement. It is commonly a percentage of the sale price and is negotiable.
Owner’s title policy
In many Midwestern markets, sellers often pay for the buyer’s owner’s title insurance policy. In Dane County, this can vary by deal and title company. Confirm who pays in your purchase agreement.
Mortgage payoff, liens, and prorations
The seller’s current mortgages, liens, association balances, and any judgments are paid from proceeds to deliver clear title. Property taxes, association dues, and utilities are prorated so each party pays their share through the closing date.
Local fees and recording in Dane County
Recording fees in Dane County are set by the county and are generally modest. The deed and the buyer’s mortgage are recorded after closing. If a transfer tax applies, it is typically expressed per $1,000 or as a flat amount. Because these practices are local and can change, verify with your title company or the Dane County Register of Deeds for the exact current schedule.
Sample buyer budgets you can use
These examples are hypothetical and meant for planning. Actual costs depend on your lender, title company, loan type, and closing date.
$300,000 purchase (20% down, buyer costs only)
- Loan origination/points: about $1,500 (example at 0.75% of a $240,000 loan; varies)
- Appraisal: $500
- Lender and processing fees: $400
- Title and lender’s policy plus title fees: $900
- Owner’s title policy: $900 if buyer pays; sometimes seller pays
- Prepaid homeowners insurance (1 year): $800
- Prepaid interest and escrow reserves: $600
- Inspections (home + radon): $450
- Recording/wires/misc: $300
- Estimated buyer cash to close, excluding down payment: roughly $7,350 to $10,000, depending on who pays title items and lender requirements
$500,000 purchase (20% down, buyer costs only)
- Appraisal: $500 to $650
- Loan fees and points: $2,500 to $3,750
- Title and recording: $1,200 to $2,000 (higher if buyer pays owner’s policy)
- Prepaids and escrows: $1,500 to $3,500
- Inspections and tests: $400 to $1,000
- Estimated buyer cash to close, excluding down payment: about $10,000 to $20,000
Notes:
- Figures above exclude the down payment and seller-side items like commissions or mortgage payoffs.
- FHA, VA, or low-downpayment loans may include upfront mortgage insurance or funding fees that increase closing costs.
- Seller net proceeds depend on commission, payoffs, closing fees they agree to pay, and any credits to the buyer.
How to get exact numbers
Follow these steps for a precise estimate on a specific property and timeline:
- Request a Loan Estimate from your lender early. Update it if your rate or loan structure changes.
- Ask your title company for a written estimate of title premiums, settlement fees, and recording charges for Dane County. Provide the purchase price and target closing date.
- Review your offer to confirm who pays the owner’s title policy and the settlement fee split.
- Get itemized quotes for inspections, radon, sewer scope, well/septic, and any required certificates.
- Confirm how property taxes will be prorated and when local installment payments are due, since timing impacts escrows.
- Use your lender’s Closing Disclosure as the final accounting for loan-related costs. You should receive it at least 3 business days before closing.
Smart tips to reduce surprises
- Get estimates in writing from both your lender and title company early in the process.
- Clarify who pays the owner’s title policy and settlement fee before offer acceptance.
- Budget for common Dane County inspections like home and radon, and add others based on property type.
- If you are selling, ask for a seller net sheet to see projected proceeds under different price and credit scenarios.
- If you are buying, schedule closing toward month end if you want to minimize prepaid interest. Confirm with your lender.
Timeline and documents you will see
- Early in the process: your lender provides a Loan Estimate outlining loan fees and rate details.
- Before closing: buyers receive a Closing Disclosure at least 3 business days before settlement.
- At or after closing: sellers receive a settlement statement showing their costs and net proceeds; the deed and mortgage are recorded with the county.
Getting a clear picture of Dane County closing costs does not have to be stressful. If you want a custom buyer cash-to-close worksheet or a seller net sheet based on your price point and timing, reach out to Fred Van Buren for local, practical guidance.
FAQs
What are typical buyer closing costs in Dane County?
- Most buyers should plan for roughly 2% to 4% of the purchase price in closing costs, excluding the down payment, depending on loan terms and who pays title items.
Who usually pays the owner’s title policy in Madison, WI?
- It is often a seller-paid item in many Midwestern markets, but in Dane County it varies by deal and title company, so confirm in your offer.
When will I receive my Closing Disclosure as a buyer?
- Federal rules require lenders to deliver the Closing Disclosure at least 3 business days before closing so you can review final numbers.
Are there transfer taxes in Dane County, Wisconsin?
- Transfer charges and recording practices are set at the state and county level; verify any transfer tax or stamp for your property with the title company or county.
How are property taxes handled at closing in Madison?
- Taxes are prorated so each party pays their share for the year, with timing and local billing cycles influencing escrow amounts collected.
Which inspections are common for Dane County homes?
- A general home inspection is standard, and many buyers also order radon testing; depending on the property, you may add sewer, pest, well, septic, or survey.
