How are "closing costs" defined in real estate transactions?

Closing costs are indeed defined as expenses that go beyond the purchase price of the property and are necessary to finalize a real estate transaction. These costs can include a wide range of fees such as loan origination fees, title insurance, appraisal fees, escrow fees, and recording fees, among others. Such costs are incurred by both the buyer and the seller and are typically detailed in the closing statement that is provided at the closing of the transaction.

Understanding closing costs is crucial for all parties involved in a real estate transaction, as they can significantly affect the total expenses associated with purchasing or selling a property. The correct definition encompasses this broad range of potential expenses that must be settled during the closing process, making it the most accurate choice among the options provided.