What does the term "closing costs" refer to in real estate transactions?

Closing costs encompass a range of various fees that are incurred during the completion of a real estate transaction. These costs can include items such as loan origination fees, appraisal fees, title insurance, and attorney fees, among others. They are necessary for finalizing the transfer of property ownership from the seller to the buyer.

Understanding closing costs is crucial for both buyers and sellers as they can significantly impact the total amount of money exchanged in the transaction. These costs are often outlined in the closing disclosure, which provides a detailed breakdown and allows parties to review and understand all expenses related to the transaction before closing.

Other choices, while they relate to aspects of real estate transactions, do not encompass the full scope of "closing costs" as defined in real estate practices.