Average closing costs in Minnesota

Minnesota, with its vast lakes, vibrant cities, and endless wilderness, beckons countless adventurers seeking a taste of the true north. But before you plant your roots in your perfect Land of 10,000 Lakes haven, understanding closing costs is crucial for a smooth transition. Fear not, future Minnesotan! This guide will equip you with the knowledge to navigate the closing cost maze and confidently claim your perfect frozen paradise.

I. Unveiling the Hidden Glaciers:

Closing costs, those additional expenses beyond the purchase price that finalize the property transfer, can feel like a hidden waterfall in the Boundary Waters. In Minnesota, these costs can range from 1.09% to 6.01% of the purchase price, with an average of $4,895 according to Bankrate and Minnesota Realtors.

Several factors influence your final closing cost, including:

  • Buyer vs. Seller: Sellers typically have higher closing costs due to real estate commissions and additional fees.
  • Property type: Single-family homes typically have higher closing costs than condos or townhouses.
  • Property location: Costs can vary by city, county, and even specific neighborhoods.
  • Loan type: FHA loans generally have higher closing costs than conventional loans.
  • Down payment amount: A larger down payment reduces the loan amount and associated closing costs.
  • Negotiation: Certain fees may be negotiable with the seller, lender, or service providers.

II. Exploring the Hidden River Valleys:

Let’s break down the common closing costs you might encounter in Minnesota:

For Sellers:

  • State recording tax: 0.11% of the purchase price, paid to the state for recording the property deed.
  • County transfer tax: Varies depending on the county, typically ranging from 0.2% to 1.5% of the purchase price.
  • Real estate commissions: Typically 5-6% of the purchase price, divided between the listing and selling agents.
  • Title insurance: Protects the buyer’s interest, typically costing 0.5-1% of the purchase price.
  • Attorney fees: Optional, but recommended for complex transactions, typically ranging from $500 to $1,500.
  • Outstanding liens or judgments: Must be satisfied before the property can be sold.

For Buyers:

  • Origination fees: 0.5-1% of the loan amount, covering the lender’s processing costs.
  • Appraisal fees: $400-$600, for a professional assessment of the property’s value.
  • Underwriting fees: $300-$500, to evaluate your creditworthiness and loan risk.
  • Credit report fees: $25-$50, for obtaining your credit history.
  • Title insurance: Protects the lender’s interest, typically costing 0.5-1% of the purchase price.
  • HOA fees: Applicable for condos or communities with shared amenities.
  • Prepaid costs: Property taxes, homeowner’s insurance, and interest payments prorated based on the closing date.

Other potential fees:

  • Survey fees: $250-$500, to verify property boundaries and avoid encroachments.
  • Attorney fees: Optional, but recommended for complex transactions, typically ranging from $500 to $1,500.
  • Courier fees: For document delivery and processing, fees can vary depending on the service provider.

III. Mastering the Superior Trail to Savings:

Understanding these factors is key to minimizing your closing costs:

  • Sellers: Negotiate your real estate commission and consider offering buyer credits to cover closing costs.
  • Buyers: Shop around for lenders and compare closing cost estimates.
  • Both: Consider a larger down payment, negotiate certain fees, and explore first-time homebuyer programs or down payment assistance options offered by the Minnesota Housing Finance Agency.

IV. Cost-Saving Strategies for Savvy Minnesotans:

Be proactive and utilize these strategies to trim your closing cost wilderness:

  • Get pre-approved to lock in interest rates and avoid potential cost adjustments.
  • Negotiate like a pro, don’t be afraid to ask questions and raise concerns about any fees.
  • Compare and contrast insurance quotes to find the best deal on homeowner’s insurance.
  • Ask for lender credits based on your creditworthiness or loan type.
  • Time your closing to avoid prorated taxes or insurance.


Q: What are closing costs in Minnesota?
A: Closing costs in Minnesota refer to the various fees and charges associated with the purchase or refinance of a home. These costs typically include lender fees, title fees, appraisal fees, and other expenses related to the closing process.

Q: How much do closing costs typically cost in Minnesota?
A: On average, closing costs in Minnesota range from 2% to 5% of the purchase price of the home. This can vary depending on factors such as the price of the property, the type of loan, and the location within Minnesota.

Q: What fees are included in Minnesota closing costs?
A: Closing costs in Minnesota typically include lender fees, such as origination fees and discount points, as well as fees for title insurance, appraisal, credit reports, and attorney or closing agent services. Other potential costs may include inspection fees, recording fees, and escrow fees.

Q: Can closing costs be negotiated in Minnesota?
A: Yes, closing costs can be negotiated in Minnesota. Some closing costs are set by the lender or third-party service providers, while others can be negotiated between the buyer and seller. However, it is important to note that certain costs, such as taxes and government fees, may be non-negotiable.

Q: Are there any programs or assistance available to help with closing costs in Minnesota?
A: Yes, there are several programs and assistance options available in Minnesota to help homebuyers with closing costs. These may include down payment assistance programs, grants, or loans specifically designed to assist low-income or first-time homebuyers. It is advisable to consult with a local lender or housing agency for more information on these programs.

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