{"id":573,"date":"2025-01-18T16:34:17","date_gmt":"2025-01-18T16:34:17","guid":{"rendered":"https:\/\/thewebsquare.com\/projects\/wsrhome\/?p=573"},"modified":"2025-01-18T16:34:48","modified_gmt":"2025-01-18T16:34:48","slug":"planning-to-sell-this-year-dont-forget-to-factor-in-these-closing-costs","status":"publish","type":"post","link":"https:\/\/thewebsquare.com\/projects\/wsrhome\/2025\/01\/18\/planning-to-sell-this-year-dont-forget-to-factor-in-these-closing-costs\/","title":{"rendered":"Planning To Sell This Year? Don’t Forget To Factor in These Closing Costs"},"content":{"rendered":"\n

If you’re thinking about selling your home this year, you\u2019ve probably been monitoring its value for a while so you can sell and still get a substantial profit. But before you start counting how much money you\u2019ll make, don\u2019t forget to factor in seller closing costs into the sale price.<\/strong> <\/p>\n\n\n\n

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Let’s take a closer look at closing costs and an overview of the fees that will be deducted from your overall profit.<\/p>\n\n\n\n

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\u201cClosing costs\u201d is a catchall term for the various fees and expenses you must pay upon closing or completing a real estate transaction. These can include various fees, expenses, and charges, which are split between the home’s buyer and seller. These fees do not include realtor commissions.<\/p>\n\n\n\n

The exact fees can vary depending on your location and the house\u2019s cost. But in total, closing fees can add up to around 2 to 5 percent of the home\u2019s sale price, according to Freddie Mac. Sellers usually take these costs out of their sale proceeds (unless you specifically ask to pay them separately), while buyers need to pay them upfront.<\/p>\n\n\n\n

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  • Transfer tax<\/strong><\/li>\n<\/ul>\n\n\n\n

    Most states or local governments charge some form of transfer tax. According to Bankrate, a real estate transfer tax, also sometimes called a deed transfer tax or documentary stamp tax, is a one-time tax or fee imposed by a state or local jurisdiction upon the transfer of real property. In other words, it’s a fee that you\u2019ll pay when the title for the home passes from you to your buyer upon closing. The cost varies widely by location but is typically dependent on the home\u2019s sale price. Also, take note that not every state has this tax.<\/p>\n\n\n\n

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    • Title-related fees<\/strong><\/li>\n<\/ul>\n\n\n\n

      In most markets, it is the seller who pays for the owner\u2019s title insurance, which protects against potential ownership issues. It\u2019s a one-time payment that protects the future owner from the financial burden of sorting out title issues in court, whether they arise at closing or years down the road. Costs can vary from a few hundred dollars to $1,500 or more.<\/p>\n\n\n\n

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      • Attorney fees<\/strong><\/li>\n<\/ul>\n\n\n\n

        In some states, home sellers are required to have a real estate attorney to help them with the transaction. The transaction cannot legally close without one. And even when it isn\u2019t mandatory, many choose to hire one to ensure their interests are protected. This is especially true when dealing with complex transactions, distressed properties, or inherited homes. <\/p>\n\n\n\n


        Since markets also vary, in some areas both the buyers and sellers have their attorneys, while in others, it\u2019s common to have one settlement attorney for the real estate transaction. Their fees range significantly \u2014 anywhere from $150 to $350 per hour, or it could be a flat fee depending on what they do for you.<\/p>\n\n\n\n

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        • Escrow or settlement fees<\/strong><\/li>\n<\/ul>\n\n\n\n

          Funds are usually held in escrow during the course of a real estate transaction, which means there will likely be fees owed to cover the services of the escrow company. This independent third party not only handles the money that\u2019s being exchanged between the seller and buyer but also manages the signing and recording of the closing documents. As with other fees, the amount varies by state but can range from $300 to $700, or sometimes more. This can also include extra line items related to documentation (drafting, notarization, recordation) and money movement (wire transfers).<\/p>\n\n\n\n

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          • Prorated property taxes<\/strong><\/li>\n<\/ul>\n\n\n\n

            One of the costs of homeownership is property taxes. And these must be up to date before you hand over the keys to the buyer. All states have some form of property tax, although the rate can vary widely. When you sell your house, you’ll be responsible for prorated property taxes due up to the date of the sale, at which point the buyer will take over. Depending on your timing, you may have to pay money at closing to bring yourself up to date.<\/p>\n\n\n\n

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            • Mortgage payoff<\/strong><\/li>\n<\/ul>\n\n\n\n

              If you still have a mortgage on the property you\u2019re selling, which is common, the remainder of that loan will need to be paid off before the sale is finalized. In some cases, your lender may require you to pay a prepayment penalty for paying off your mortgage before the end of the term. To get an accurate picture of this closing cost, make sure to talk to your lender about what will be required to pay off the home loan.<\/p>\n\n\n\n

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              • HOA fees<\/strong><\/li>\n<\/ul>\n\n\n\n

                Just like with property taxes, if you\u2019re living in a community that is subject to a homeowner\u2019s association, HOA fees will also need to be paid up-to-date as of closing day. Some HOAs also charge a transfer fee to transfer your property to the new owner. Best to check with your HOA\u2019s rules and regulations so you won\u2019t be surprised by any charges.<\/p>\n\n\n\n

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                • Seller concessions<\/strong><\/li>\n<\/ul>\n\n\n\n

                  In a buyer\u2019s market or just to make the deal go through, it\u2019s a common practice for a seller to offer to pay some of the buyer\u2019s closing costs. This is also referred to as seller contribution or seller credit, which can help sweeten the deal and make your home more attractive to potential buyers. One of the most common seller concessions is agreeing to cover the cost of necessary repairs, especially after the home inspection. <\/p>\n\n\n\n

                  The total amount of seller concessions may be limited by the type of home loan the buyer is using. For example, loans backed by government agencies, such as the Federal Housing Administration (FHA), have their limits on seller concessions. If you\u2019ve offered any seller concessions as part of your deal, expect that these funds are also due at closing.<\/p>\n\n\n\n

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                  Closing costs are so named because they are literally due when you close on the sale of your home. This is after you and the buyer meet with the closing agent, title company, and\/or attorneys to disburse the funds and sign all necessary documents. All of the items we’ve covered above will be deducted from your proceeds on the sale so you won\u2019t need to bring cash to your closing unless you specifically ask to pay for them separately or your property is underwater, which means you owe more on it than it’s worth.<\/p>\n\n\n\n

                  Unfortunately, though, you often won\u2019t know how much your closing costs will be until roughly three business days before closing day. You will receive a closing statement or settlement statement, a document that includes an itemized list of closing fees. If you have a trusted and reliable agent working on your side, they may prepare a seller\u2019s net sheet. This is an unofficial document that is an itemized breakdown of all of the closing costs, plus an estimate of the sum you will receive, or net after the final purchase contract is signed.<\/p>\n\n\n\n

                  <\/p>\n","protected":false},"excerpt":{"rendered":"

                  If you’re thinking about selling your home this year, you\u2019ve probably been monitoring its value for a while so you can sell and still get a substantial profit. But before you start counting how much money you\u2019ll make, don\u2019t forget to factor in seller closing costs into the sale price.  Let’s take a closer look […]<\/p>\n","protected":false},"author":1,"featured_media":575,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-573","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate"],"_links":{"self":[{"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/posts\/573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/comments?post=573"}],"version-history":[{"count":2,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/posts\/573\/revisions"}],"predecessor-version":[{"id":576,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/posts\/573\/revisions\/576"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/media\/575"}],"wp:attachment":[{"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/media?parent=573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/categories?post=573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thewebsquare.com\/projects\/wsrhome\/wp-json\/wp\/v2\/tags?post=573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}