Which term refers to costs associated with closing a real estate transaction that may include taxes, deed recording fees, and mortgage fees?

Closing costs refer to the various fees and expenses that are incurred in the process of closing a real estate transaction. These costs can encompass a wide range of items, including taxes, deed recording fees, title insurance, appraisal fees, and mortgage-related fees, among others.

In the context of a real estate transaction, closing costs are typically paid at the end of the process when ownership is officially transferred. It’s important for buyers and sellers to understand these costs as they can significantly impact the overall financial obligations associated with the transaction.

While terms like prepaid expenses, settlement charges, and buyer's costs may be related to different aspects of a real estate transaction, they do not encapsulate the comprehensive scope of fees categorized under closing costs. Prepaid expenses generally refer to expenses that are paid in advance for services that will be received in the future, while settlement charges might refer to specific fees included in the closing statement. Buyer's costs usually pertain to the expenses that the purchaser will incur but do not encompass the complete variety of fees that can arise during closing. Thus, referring to these expenses as closing costs provides a clear and accurate representation of the various fees involved in finalizing a real estate transaction.