Final answer:
Closing costs are the miscellaneous expenses incurred during the transfer of property ownership. They can include several types of fees and typically total 2%-5% of the purchase price. The concept of escrow relates to these costs by handling ongoing property expenses through a third party.
Step-by-step explanation:
The miscellaneous expenses above the purchase price that buyers and sellers incur in the transfer of property ownership, as mentioned in the question, are known as closing costs. These costs may include fees for loan origination, home inspections, credit reports, attorney services, and more.
They typically range from 2% to 5% of the property's purchase price, and they are a standard part of the home buying process. An important factor to consider in relation to closing costs is the concept of escrow.
Escrow involves a neutral third party handling the money, which is held until the completion of the property transfer, and then used to pay ongoing expenses like home insurance and property taxes, often as part of the normal monthly mortgage payment.