Buying or selling in downtown Bozeman and not sure who pays what at closing? You’re not alone. Closing costs can feel confusing, especially when you’re juggling inspections, loan documents, and a move. This guide breaks down the typical fees in Montana, who usually covers them in Gallatin County, and what you can negotiate so you can plan with confidence. Let’s dive in.
What closing costs cover in Bozeman
Closing costs are the non-price items you and the other party pay at closing. They include lender fees, title and escrow charges, county recording fees, prepaid items like taxes and insurance, and seller-side costs like commission and mortgage payoff. Buyers receive a Loan Estimate and a Closing Disclosure that list these items in detail.
Bozeman’s higher home prices can raise the dollar totals on percentage-based items. Title premiums, lender fees tied to your loan, and commissions often scale with price, so expect higher totals here than in lower-cost Montana markets.
Buyer closing costs in Bozeman
Typical range
Buyers typically budget about 2 to 5 percent of the purchase price for closing costs, not including the down payment. Your exact number depends on your loan program, price point, and any seller credits you negotiate.
What buyers usually pay
- Lender fees and origination: Application, processing, and underwriting. Often 0.5 to 1.5 percent of the loan amount, or flat fees around a few hundred to a few thousand dollars.
- Appraisal: Commonly buyer-paid. Many single-family appraisals fall around 450 to 800, with specialized properties costing more.
- Credit report, flood cert, verifications: Small third-party charges that often total 20 to 200.
- Title insurance, lender’s policy: Usually buyer-paid when required by the lender. This is a one-time premium.
- Owner’s title insurance: Custom varies. In many Montana transactions the seller pays for the owner’s policy, but it is negotiable.
- Escrow or settlement fee: Typically split or assigned by local custom. Buyer’s share is often a few hundred dollars.
- Recording fees: County charges to record your mortgage and other documents. Montana has no state real estate transfer tax.
- Prepaid items and reserves: Prepaid interest from closing to your first payment, first-year homeowner’s insurance, and initial deposits to fund your tax and insurance escrow.
- HOA and condo fees: Prorated dues for your ownership period after closing and any applicable transfer fees.
- Inspections and tests: Home inspection, plus septic, well, or pest inspections where applicable. Many home inspections range 300 to 600. Water or septic tests can range 200 to 600. Surveys, if needed, can range 300 to 900.
- Upfront mortgage insurance: Some loan types include an upfront mortgage insurance premium collected at closing.
Key documents you’ll receive
- Loan Estimate: Within three business days of loan application. It outlines your projected loan and closing costs.
- Closing Disclosure: At least three business days before closing. It shows your final costs and any seller credits.
Seller closing costs in Bozeman
Typical range
Sellers often see total transaction costs around 6 to 10 percent of the sale price. The commission is the largest single item for many sellers, with the rest made up of title fees, prorations, and smaller charges.
What sellers usually pay
- Real estate commission: Commonly paid by the seller unless otherwise agreed. Many transactions reflect a total commission around 5 to 6 percent, which is fully negotiable.
- Owner’s title insurance: In many Montana deals, the seller pays for the owner’s policy as a customary item. This is negotiable.
- Escrow or settlement fee: Often split or allocated by custom and contract.
- Mortgage payoff and liens: Your existing loan(s) and any liens are paid off at closing using your proceeds.
- Prorations: Property taxes and HOA dues are prorated to the closing date based on what you have paid or owe.
- Recording charges for releases: County fees to record the release of your mortgage or other encumbrances.
- Seller concessions or credits: If negotiated, you may cover some of the buyer’s closing costs or provide a repair credit, which reduces your net proceeds.
- Repairs or escrow holds: If you agree to complete repairs, you may pay for them or set aside funds until the work is done.
- Transfer taxes: Montana does not have a state real estate transfer tax. Local special assessments, if any, are handled case by case.
Who pays what in downtown Bozeman
Montana closings are commonly handled by title companies as escrow or settlement agents. Who pays which title fees or settlement charges can vary by local custom and negotiation. In many Montana transactions, sellers cover the owner’s title policy, while buyers cover the lender’s title policy. Gallatin County charges recording fees set by the county. Because practices can shift, confirm current custom and fees with your agent and a local title company.
What’s negotiable
Many closing costs are negotiable and should be discussed in your offer or counteroffer:
- Owner’s title insurance premium
- Seller concessions to offset buyer closing costs
- Repair credits versus seller-completed repairs
- Allocation of escrow or settlement fees and recording charges
- HOA transfer fees and any special assessments
- Closing date, which affects tax and interest prorations
Timing and what to expect
Buyers should expect a Loan Estimate soon after applying and a Closing Disclosure at least three business days before signing. These documents help you compare fees and ask questions. Sellers should request a net proceeds worksheet early and obtain a mortgage payoff statement shortly before closing so the title company can calculate accurate proceeds.
Real-world examples
- Buyer example at 2 percent: On a 500,000 purchase, 2 percent equals 10,000 in closing costs. A mix could include an appraisal around 600, lender fees near 2,500, title and recording near 1,200, prepaid insurance and escrows near 4,000, and inspections and misc near 1,700.
- Seller example at 7 percent: On a 500,000 sale, 7 percent equals 35,000. A typical mix might include a 5.5 percent commission at 27,500, owner’s title policy and settlement fees near 1,500, and prorations or other fees near 6,000.
How market conditions affect costs
In a seller’s market, sellers have more leverage and are less likely to cover buyer closing costs or large repair credits. In a buyer’s market, buyers may negotiate more concessions, including closing cost credits or repairs. Your strategy should reflect current conditions in downtown Bozeman and the wider Gallatin Valley.
Quick prep checklists
Buyers
- Ask your lender for a Loan Estimate early and review each fee.
- Request a title fee quote so you can budget for policies and settlement charges.
- Plan for prepaid taxes, insurance, and interest on top of other fees.
- Schedule inspections quickly to preserve your timelines.
- Confirm HOA dues, transfer fees, and any special assessments.
- Review your Closing Disclosure as soon as it arrives and ask questions.
Sellers
- Request a net proceeds estimate from your agent and title company.
- Order a payoff statement from your lender so interest and fees are accurate.
- Review the title commitment for any liens or issues to clear.
- Decide on repairs or credits before you list or shortly after inspection.
- Verify HOA balances and property tax status for clean prorations.
You deserve a clear, stress-reduced closing. If you want a tailored closing-cost or net-proceeds worksheet for your price point and loan type, let’s talk. Schedule a free consultation with Tawnya Storm for local guidance and an easy-to-understand plan.
FAQs
How much should I budget for buyer closing costs in Bozeman?
- Most buyers set aside about 2 to 5 percent of the purchase price for closing costs, not including the down payment.
Do sellers in Montana usually pay for the owner’s title insurance?
- In many Montana transactions, sellers pay for the owner’s policy, but it is negotiable and can vary by local custom and contract.
Can a seller pay my closing costs in Gallatin County?
- Yes, seller concessions are common in some market conditions and are negotiated in the offer; they reduce the seller’s net proceeds.
Who pays for inspections, appraisal, and survey in Bozeman?
- Buyers typically pay for the appraisal, inspections, and any needed tests or survey, though terms can be negotiated.
Will I see all closing costs before I sign?
- Yes. Buyers receive a Loan Estimate early and a Closing Disclosure at least three business days before closing that shows final numbers.
Are there transfer taxes in Montana or Gallatin County?
- Montana does not have a state real estate transfer tax. Expect county recording fees set by Gallatin County for your documents.
What are typical escrow or settlement fees and who pays them?
- Total settlement fees often range from a few hundred to about 1,200 and are either split or assigned by local custom and the purchase agreement.
