What aspect of a transaction do closing costs encompass?

Closing costs refer to the various expenses that buyers and sellers incur during a real estate transaction, beyond the purchase price of the property. This typically includes a range of fees and expenses associated with finalizing the sale.

The option that includes legal fees, inspections, and loan costs accurately represents a significant part of closing costs. Legal fees may cover the cost of title searches or attorney services, while inspections are vital for assessing the condition of the property. Loan costs encompass various charges related to obtaining a mortgage, such as origination fees and points. Collectively, these expenses can significantly add to the overall cost of buying or selling a property, making them an essential component of the closing process.

In contrast, the other options do not capture the full scope of closing costs. Marketing strategies and advertising pertain more to efforts to sell the property rather than expenses incurred at closing. Homeowner association fees may be associated with property ownership but are typically paid separately and don't specifically represent closing costs. Lastly, utilities and service deposits are ongoing costs related to the property's operation, rather than direct expenses involved in the transaction's conclusion. Thus, the correct answer comprehensively covers the essential expenditures associated with closing a real estate deal.