These are expenses that buyers and sellers are expected to incur during the completion of a real estate transaction. They come in the form of service costs, appraisal fees, title searches, deed recording, credit report charges and so an; and these costs occur when the title of the property is about to be transferred from the seller to the buyer. Although the closing costs depend on the location and value of the real estate being transferred, majority of home buyers are charged between 2% and 5% of the total purchase price of the property as closing costs. Closing costs may also include statutory costs, third party costs, Up-front expenses as well as RESPA charges. The best way to settle closing costs is by paying them out-of-pocket as one-time expenses so that you don’t end up paying interest on them if you fold them into the loan.