In addition to your downpayment, closing costs are the additional fees and expenses on your final settlement statement.
These include any origination fees your lender charges, points, the escrow company fees, prepaid interest, property taxes, insurance and about a dozen or so other line items.
How much are closing costs? Your loan officer can best advise you as to what you might pay but in general, in addition to your 20% downpayment (or 5-10% depending on your loan program) you will need additional funds to close escrow. These vary depending on a number of factors but in general may be between 1-2% of your purchase price.
Agents giving credits to their clients from their commission is absolutely legal and ethical as long as the following guidelines are followed: