Final answer:
Closing costs, also known as settlement costs, are expenses incurred when buying a home, such as real estate agent commissions and home inspection fees.
Step-by-step explanation:
Closing costs, also referred to as settlement costs, are the expenses incurred during the process of buying a home. These costs typically include fees for services related to the purchase of the property, such as real estate agent commissions and home inspection fees.
Examples of closing costs include:
- Real estate agent commissions: When you buy a home, the seller usually pays the commission for both their agent and your agent.
- Home inspection fees: Before purchasing a property, it's common to have a professional inspection done to identify any potential issues with the home.
It's important to note that closing costs may vary depending on factors such as location, the type of property, and the terms of the purchase agreement.