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Closing Costs to Sell a House
When I meet with sellers I find that many are not aware of the costs involved in selling a home so I want to be sure to educate you all on just what to expect.
Assuming you are going to hire a real estate agent because without one you could find yourself in a maze of confusion – or worse yet you could lose money! So, these are the expenses you can expect:
The first expense we will talk about is Real estate commission – the seller is responsible for real estate commissions. When you purchase a home you typically do not pay a real estate agent a commission. The seller pays a contracted commission amount to the listing Firm. The listing firm then offers a portion of the contracted compensation to a buyers agent to represent a buyer to purchase the home, This is typically half of the set commission. And - no the listing agent does not get to keep it all! - it gets split many ways.
Another expense is excise tax to the county- currently that rate is 1.78% of the sales price. Starting January 1 2020 excise tax will be figured with a tiered tax. Please see my excise tax video - you can see the link at the top of the screen
Title and Escrow fees are another expense. These are two very important companies. Escrow prepares the closing documents and the transfer of ownership. Title insures the transfer of title is clear and takes place efficiently and title insurance offers a protection against claims from defects in title
Any loan balances, liens, or judgements will be paid off
Some other expenses are Wire, courier document fees, recording fees with the county. If your home has a home owners association there is often a transfer fee – that fee often is paid by the seller. It depends on what is negotiated and what the homeowner association documents state. Homeowners dues will also be prorated at closing.
You are also responsible for the taxes during your ownership. If taxes have already been paid then you would get a refund for the amount of taxes you have paid in that That cover the buyers ownership timeframe
One additional cost that is completely negotiable is the buyers closing costs. Many times buyers will ask the seller to pay for the buyers costs to close on the home. A good portion of the buyers are first time buyers and most people don’t put down 20% anymore – most people just don’t have a $100,000 sitting in the bank to buy a home so because of this a buyer may ask the seller to pay for all or a portion of their costs – again this is negotiable and you can talk with your real estate agent about the pros and cons.
I think that covers the expenses… Whew!
If you are considering selling your home soon or in the near future, your first step is to figure out how much your home is worth and what you will net. Check out my video on Home Valuations.
– If you got some good information out of this video please like this video and comment below what you learned. I would love to hear from you. Thank you so much for watching - I will see you on the next one!