75-Hour Broker Pre-License Midpoint Practice Exam 2025 - Free Broker Pre-License Practice Questions and Study Guide

Closing costs refer specifically to the expenses that buyers and sellers incur during the transaction of purchasing real estate. This includes various fees such as loan origination fees, title insurance, appraisal fees, and taxes that are part of the closing process. These costs are typically paid at the closing of a real estate transaction, which is when ownership is transferred from the seller to the buyer.

The other options pertain to different aspects of real estate. Costs related to property maintenance and repairs are ongoing expenses that homeowners might encounter after purchasing a property, but they are not considered closing costs. Expenses incurred during property management refer to costs associated with managing a rental property, which also fall outside the scope of closing costs. Lastly, taxes paid on property sales may include certain transfer taxes, but they do not encompass the full spectrum of closing costs, which also includes various fees beyond just taxes. Thus, the definition of closing costs encompasses all of these various expenses associated directly with the transaction process itself.