Every buyer expects to haggle over the price of a home.

But if you know what to ask for, you can reduce your closing costs, too.

Add up all of the fees you'll be expected to pay when your deal is finalized, and you're not looking at a trivial expense. They can add 3% to 6% to the price of your home, depending on where you live.

So paying a little attention to those closing costs during the home-buying process can save a lot of aggravation at settlement time.

Our 5 smart moves to reduce closing costs will show you how.

Smart move 1. Ask the seller to pay part or all of your closing costs.

It's a buyer's market, with a glut of homes competing for your attention. Savvy sellers know they must offer inducements, such as paying at least some closing costs, to close a deal.

Most will start by offering to pay for specific services, such as an appraisal, home inspection or title company fees.

But you're better off asking for a specific dollar amount as part of your offer on the home. The closing costs then become part of the overall negotiations. Your real estate agent can guide you on what to ask for.

Be aware that your lender may have limits on how much the seller can contribute, based on the type of loan and how much of a down payment you're making.

Smart move 2. Go after lender fees.

After you apply for a mortgage, your lender is required to provide a "Good Faith Estimate" that itemizes all of the costs, including its fees for processing and finalizing the purchase.

Most of the fees you want to look at are located in the "800 Section" of the form.

Don't get caught up in what those fees are called or worry whether they're fair or reasonable. That's virtually impossible to know because lenders slice and dice the money they're asking for in so many different ways.

Some mortgage companies roll everything into a single big origination fee while others break their charges down into a bunch of smaller fees for application processing, underwriting, document preparation and courier services. Some even throw in what are known as "junk fees," which is just a way to collect extra money from buyers who don't pay attention.

Just sit down with your loan officer and ask him or her to waive or reduce any fee that sounds like it covers administrative tasks. Fees for third-party services, such as credit reports and appraisals, are usually non-negotiable.

Then, before you commit to the deal, ask the loan officer to guarantee that the lender fees quoted on the GFE, including those for third-party services, will not increase. And get that guarantee in writing.

Because there are no legal penalties for wrong estimates, some loan officers will deliberately low ball the figures to get your business. They know you're unlikely to walk away from a closing even if the final closing costs come in much higher.

Smart move 3. Reduce the cost of title insurance.

Title insurance protects you, and your lender, if the ownership of your property is ever questioned.

The key thing to remember is that you aren't required to use the title insurer your real estate agent or lender recommends. You can shop around for the best rate.

Just be sure to ask whether you're responsible for both the lender's and owner's policies (it varies by state). And you should ask each insurer to include all relevant costs, such as the title search, title exam and closing fees, in its quote.

If the seller bought the home in the last five to 10 years, ask for a copy of their title insurance policy so you can apply for a "reissue rate," which may save you as much as 40% on the title insurance premium.

Special discounts may be available if you're a first-time buyer or if you buy other insurance from the provider, such as your homeowner's policy.

Smart move 4. Pick your own settlement company.

Settlements may be conducted by lenders, title insurance companies, escrow companies, real estate brokers or attorneys for the buyer or seller -- it varies across the country.

Your real estate agent will certainly refer you to an in-house or affiliated settlement firm. But you have the right to choose who conducts the closing of your deal.

Independent settlement agencies often have more incentive to offer you a better price. The real estate agency's in-house firm will sometimes match competitor's discounted rates. So you simply can't lose by shopping around.

Just make sure you're not being charged double for the settlement. Your GFE should have only one of the following line items: settlement fee, closing fee, attorney fee. All three reference the exact same thing -- the services of the person coordinating the closure of your loan. If you have more than one listed, definitely inquire.

Smart move 5. Update your survey.

If a survey is required to mark the boundaries of the property, ask your lender if he will accept an updated version of the one the previous owner did. Then you can simply ask the seller who the surveyor was and contact them for an update, which again will be much less than having a new one done.

Regardless of the route you choose, making the effort to reduce your closing costs may save you hundreds of dollars -- money better spent on furnishing your new home.

By Tracy Needham

Interest.com Contributing Editor

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