Understanding Closing Costs and What to Expect

You’ve found your dream home in Madison — congratulations! 🎉
But before you get the keys, there’s one more important step to understand: closing costs.

If you’re a first-time home buyer, these expenses can come as a surprise. Don’t worry — this guide will break down what closing costs are, how much to expect, and smart ways to prepare so there are no surprises on closing day.

💰 What Are Closing Costs?

Closing costs are the fees and expenses paid at the end of your home purchase. They cover the legal, financial, and administrative steps required to transfer ownership of the property.

They typically include:

• Loan origination fees (charged by your lender)

• Appraisal and inspection fees

• Title insurance and escrow fees

• Attorney or closing agent fees

• Property taxes and prepaid interest

• Homeowners insurance premiums

📊 How Much Are Closing Costs in Dane County?

In Wisconsin, closing costs typically range from 2% to 5% of your home’s purchase price.
For example, if you’re buying a $400,000 home in Sun Prairie or Verona, expect to pay around $8,000–$20,000 in total closing costs.

The exact amount depends on factors like your lender, loan type, and property taxes in your city (which vary between Madison, Fitchburg, Middleton, and Waunakee).

🏦 Who Pays Closing Costs?

Both buyers and sellers have closing costs — but buyers usually pay the majority.
However, depending on your offer and market conditions, you can sometimes negotiate for the seller to cover part of these costs.

At Alexander Real Estate, we guide first-time buyers through each step and help you understand when and how to negotiate closing costs to your advantage.

🧾 Tips for Managing Closing Costs

1. Ask for an Estimate Early: Your lender will provide a “Loan Estimate” showing expected costs — review it carefully.

2. Shop for Services: You can compare quotes for title, insurance, and inspection services.

3. Negotiate with the Seller: In some cases, sellers may agree to help cover part of the fees.

4. Check for First-Time Buyer Programs: Dane County offers resources and down payment assistance that can offset expenses.

🧭 What to Expect on Closing Day

Closing day is exciting — it’s when you officially become a homeowner! 🎉
You’ll sign final documents, pay your closing costs, and receive the keys. Your agent and lender will walk you through each step to make sure you’re comfortable and confident.

💬 The Bottom Line

Understanding closing costs early helps you plan ahead and avoid stress later. With the right guidance, you can budget confidently and focus on what matters most — moving into your new home.

At Alexander Real Estate, we help first-time buyers throughout Madison and Dane County navigate every part of the process with transparency and care.