Which of the following best describes "closing costs"?

Closing costs encompass a wide array of expenses that are necessary to finalize a real estate transaction. This includes not only fees associated with the mortgage, but also expenses such as title insurance, appraisal fees, attorney fees, and various government fees. They are incurred by both buyers and sellers and are critical in ensuring that the transfer of property title is legally binding and properly executed.

Options that limit the definition of closing costs—such as fees associated only with mortgages, or costs incurred solely by the seller—do not provide a complete picture. Home inspections, while important, are just one aspect of the broader category of closing costs. Thus, the selection that identifies all expenses necessary to close a real estate transaction correctly captures the full scope of what closing costs entail.