Closing costs in Arizona: what buyers and sellers pay

Why there is no single typical total

Some closing costs are set by a public body: recording fees by statute, and property tax by the county. Title insurance premiums are filed by each insurer with the Arizona Director of Insurance, who may disapprove them. Other charges are set by private companies: lender fees, escrow fees, inspections, surveys and brokerage compensation.

So the total depends on your loan, your contract and the closing date. The variable items appear on two federal forms. The lender must give you a Loan Estimate within three business days of receiving your application, and you must receive the Closing Disclosure at least three business days before you close (Consumer Financial Protection Bureau). For a walk-through of each line, see closing costs explained.

Line by line: what each cost is

Lender charges. Origination, appraisal, credit report and underwriting fees are set by the lender and the firms it uses. No Arizona rate table applies. Compare lenders on the standard Loan Estimate. See also home appraisal cost.

Title insurance. Arizona does not set one statewide price. Every title insurer must file its fee schedules, classifications and rules with the director, and the filing may take effect unless the director disapproves it after a hearing (A.R.S. §§ 20-376, 20-378). A title insurer or agent may not deviate from its filed rates, and an overcharge can lead to a refund or a civil penalty (§ 20-379). The premium therefore depends on the insurer’s filed schedule and the policy amount. We did not read a specific schedule for this article. Background is in title insurance explained.

Escrow fee. Escrow is a transaction in which money, documents or title are held by a neutral person until a contingency is met, and an escrow agent is a person in the business of accepting escrows (A.R.S. § 6-801). Escrow agents are licensed under Title 6, Chapter 7. The chapter exempts, among others, attorneys not actively conducting an escrow business and real estate brokers holding earnest money in the regular course of business (§ 6-811). No statute I read sets the amount of an escrow fee, so request it in writing. See earnest money.

Recording fees. The county recorder receives $30 per instrument for recording papers where no other fee is specified, or $15 if a government body is a party and requests the recording (§ 11-475). A purchase with a loan commonly records a deed and a deed of trust, so two instruments.

Transfer tax. None. The constitution bars new real property transfer taxes and fees, and the statutes provide a $2 fee that is already inside the $30 (§ 11-1132). Details are on the transfer tax page. An affidavit of legal value must be attached to the deed or contract (§ 11-1133).

Prepaid and prorated property tax. Arizona bills in two halves, due October 1 and March 1 (§ 42-18052). Lenders may collect the tax through an escrow account. The amount depends on your home; see Arizona property tax.

Attorney. See real estate attorney in Arizona.

Brokerage compensation. Set by agreement and negotiable. See real estate commission.

Who pays what in Arizona

The statutes I read do not assign closing costs between buyer and seller. The sale contract does. The table shows only what the law fixes.