Not planning for closing costs can lead to anxiety.
24. Set Aside Money for Closing Costs
As the buyer, you are responsible for the closing costs of the home. These costs can go well into the thousands of dollars, so you need to make sure that you plan for them. Otherwise, they can take you unaware and cripple your budget.
While you are closing on the home, the seller deposits the deed to it, and you collect the money for it into a state called escrow. Once the conditions of escrow are met, the deed is released to you, and the funds are released to the seller.