North Dakota Real Estate Practice Exam 2026 – Comprehensive All-in-One Guide for Exam Success!

Closing costs in a real estate transaction encompass a variety of fees that are incurred during the process of finalizing a property sale. These costs typically include, but are not limited to, appraisal fees, title insurance, loan origination fees, recording fees, and prepaid items like property taxes and homeowners insurance.

The significance of these costs is that they need to be paid at the closing table, which is the final step in the transaction where ownership is officially transferred. Therefore, understanding that closing costs are a collective term for all necessary fees incurred during the transaction is crucial.

The other options focus too narrowly on specific types of costs (like only title insurance or only home inspections), which do not encapsulate the complete range of expenses covered under closing costs in a transaction. This broader scope is what distinguishes the correct answer from the others.