Are you trying to pin down how much cash you need to close on a home in Prescott? You are not alone. Closing costs can feel fuzzy, yet they are often your third-biggest expense after the down payment and moving costs. In this guide, you will learn what buyers and sellers usually pay in Arizona, what is negotiable in Prescott, how to estimate your total, and the best questions to ask your lender and a local title company. Let’s dive in.
Closing costs basics
Closing costs include lender fees, title and escrow charges, recording costs, inspections, and prepaid items like property taxes and insurance. In Arizona, many costs are negotiable, but local customs often guide who pays what. For most financed buyers in Prescott, a practical rule of thumb is 2% to 5% of the purchase price for closing costs, not counting your down payment.
Your exact total depends on your loan program, whether you buy discount points, if your lender sets up an escrow account for taxes and insurance, HOA-related fees, and county recording charges.
Who pays what in Prescott
In Arizona and the Prescott area, responsibilities are often guided by custom, yet they remain negotiable.
Buyer typically pays:
- Lender fees and any discount points
- Appraisal and credit report
- Lender’s title insurance policy
- Buyer share of escrow fees (often split 50/50 in Arizona)
- Recording fee for the deed of trust or mortgage
- Home and wood-destroying organism inspections
- Prepaid taxes, insurance, and any escrow reserves
- Mortgage insurance, FHA or VA premiums per program
Seller typically pays:
- Real estate broker commissions
- Owner’s title insurance policy in many Arizona deals
- Seller share of escrow fees (often split)
- Recording fee for the deed to transfer title
- Prorated property taxes through the day of closing
- Agreed items like a home warranty or certain HOA-related transfer items
Negotiable items:
- Owner’s title policy (common for sellers to pay, but negotiable)
- Escrow fee split (often 50/50)
- Who pays specific recording fees
- Seller credits toward buyer closing costs, subject to loan program limits
Buyer closing cost checklist
Plan for these common line items when you finance a home:
- Lender origination and processing fees
- Discount points or rate buy-down, if you choose to lower your rate
- Appraisal and credit report
- Lender’s title insurance policy
- Escrow or settlement fee share
- Recording fee for your loan
- General home inspection and a termite or WDIR inspection
- HOA transfer or document fees, if applicable
- Prepaid interest, property taxes, and homeowner’s insurance
- Mortgage insurance or program premiums for FHA or VA loans
Most financed buyers should plan on roughly 2% to 5% of the purchase price for these costs. Cash buyers usually pay less, since there is no loan.
Seller costs at a glance
Sellers in Arizona commonly pay broker commissions and, in many Prescott transactions, the owner’s title insurance policy. Sellers also pay their share of escrow fees, recording of the deed, and prorated property taxes through closing. Total seller costs are often 6% to 10% of the sale price when commissions are included. Seller costs, excluding commissions, are usually much smaller.
Estimate your cash to close
Use these quick guides to set expectations, then confirm with your lender and a local title company:
- Buyers: plan on about 2% to 5% of the purchase price in closing costs
- Sellers: plan on 6% to 10% of the sale price including commissions
Your number can move up or down based on discount points, prepaid items, HOA fees, county recording charges, and any negotiated credits.
Example: buyer on a $400,000 home
- Loan origination or points: 0% to 1% ($0 to $4,000)
- Appraisal: $500 to $900
- Lender’s title policy: $400 to $1,200
- Escrow fee share: $500 to $1,500
- Recording the loan: $50 to $200
- Prepaid taxes, insurance, and escrow reserves: a few hundred to a few thousand
- Inspections: $300 to $1,000
- Estimated buyer total (excluding down payment): about $8,000 to $20,000
Example: seller on a $400,000 sale
- Broker commissions example at 5%: $20,000
- Owner’s title policy: $1,000 to $2,500
- Escrow fee share: $500 to $1,500
- Prorated property taxes: varies by timing and rate
- Estimated seller total including commission: roughly $22,000 to $25,000, higher if commission is 6%
Yavapai County specifics
- Recording fees: Yavapai County charges per document and per page. These fees are generally modest, often in the low hundreds. Ask your title company for the current fee schedule.
- Property tax proration: Arizona taxes are billed on an annual cycle based on prior-year assessed value. At closing, the seller typically pays taxes accrued through the day of closing. The timing relative to tax due dates can change your cash to close.
- Owner’s title policy: It is common in many Arizona and Prescott deals for sellers to pay the owner’s policy, but it is negotiable. Confirm what is customary for your property and price point.
- Escrow process: Arizona uses neutral title or escrow companies to handle closings. Buyers and sellers often split escrow fees, but check your provider’s Prescott fee schedule.
- Inspections: Many Prescott-area buyers order both a general home inspection and a wood-destroying organism report. Lenders may require a WDIR for certain properties, especially in rural or wooded areas.
- HOA fees: Some neighborhoods charge transfer or resale fees. These can be several hundred dollars and vary by association.
- Special property conditions: Properties on septic or well, or in wildfire mitigation zones, may require inspections or certifications that add to closing costs.
When to talk to lender and title
Connect with your lender as soon as you know your price range. Request a Loan Estimate early. By federal rules, lenders issue a Loan Estimate within three business days of your application and a Closing Disclosure at least three business days before closing.
Reach out to a local Prescott or Yavapai County title and escrow company for a fee quote as soon as you are under contract, or even before you write an offer if you want firm estimates for title, escrow, and recording fees.
Questions to ask your lender:
- Can you provide a Loan Estimate tailored to my price, program, and down payment?
- What are my origination fees, discount points, and expected prepaids and escrow reserves?
- Which fees can the seller pay, and what are the limits for my loan program?
- What inspections or documents will you require, such as a WDIR or septic inspection?
Questions to ask your title or escrow company:
- What are buyer and seller escrow fees in Prescott, and are they typically split?
- What are current Yavapai County recording fees for the deed and deed of trust?
- What are the owner’s and lender’s title insurance premiums for my price point?
- Who commonly pays for the owner’s title policy in Prescott at my price tier?
- How will you calculate property tax proration for my closing date?
Documents to request and review
- Loan Estimate and Closing Disclosure from your lender
- An itemized title and escrow fee quote and a sample settlement statement
- Yavapai County recording fee schedule or a summary from your escrow officer
- Arizona Residential Seller Property Disclosure and any HOA resale package
- Recent tax bill or assessor data for the property
Tips for first-time and relocating buyers
- Get preapproved and request a Loan Estimate before making an offer
- Ask whether the seller is likely to pay the owner’s title policy in your submarket
- If the property has an HOA, request the resale documents early to understand fees
- Budget extra for prepaids and escrow reserves, which can be several months of taxes and insurance
- Plan for inspection and WDIR costs in your moving budget
- Ask for a sample Closing Disclosure a few days before closing and compare it to your Loan Estimate
Ready to plan your budget?
If you want a clear, Prescott-specific estimate for your closing costs, connect with a local lender and a trusted title company, then review the numbers together line by line. If you would like help coordinating quotes or understanding customs in your neighborhood, reach out to Josh Day. You will get practical guidance, timely answers, and a local advocate by your side from offer to closing.
FAQs
What are average closing costs for Prescott buyers?
- Most financed buyers can expect about 2% to 5% of the purchase price in closing costs, while cash buyers often pay under 1% since there is no loan.
Who pays the owner’s title insurance in Prescott, AZ?
- In many Arizona and Prescott transactions the seller pays the owner’s policy, but it is a market custom and can be negotiated in your offer.
How are escrow and recording fees handled in Yavapai County?
- Escrow fees are often split between buyer and seller, and recording fees are typically modest, so ask your title company for the current schedule and splits.
What prepaid items should I expect at an Arizona closing?
- You usually prepay homeowner’s insurance, a portion of property taxes, and daily interest from funding to your first payment, plus any escrow account setup.
When will I receive my final closing numbers?
- Your lender must provide a Closing Disclosure at least three business days before closing, which you should compare to your earlier Loan Estimate.
