Closing costs are fees that sellers must pay to transfer ownership of their home to a buyer. They can be a big chunk of your profit when you sell a house, especially in markets where real estate commissions are high. These fees can add up to 6% to 10% of the final sales price.
Real Estate Commissions – The Largest Seller Cost
Real estate commissions are the largest contributor to closing costs in most areas, accounting for 5-6% of a home’s sale price. This is where working with a low commission realtor can really help you save.
A low commission agent can also reduce your closing costs by negotiating lower rates with title insurance companies. Choosing a low commission agent can put hundreds or even thousands of dollars in your pocket, depending on your home’s value and the agency you choose to represent you.
Property Taxes & Homeowner Association Fees – These can also be a big chunk of closing costs. As a seller, you’ll likely have to pay both New York City and New York State’s property transfer taxes as well as your homeowner association (HOA) fees. These fees are often prorated based on the closing date, so they’re usually split between you and your buyer. Click here https://www.investorhomebuyers.com/
Attorney Services – Another common seller closing cost is the attorney who will assist you in the sale of your home. Just like the lawyer who helped you purchase your home, your attorney will help you draft a contract and negotiate with the buyer’s attorney.
The attorney will be looking out for your best interest, as well as your financial interests. They’ll make sure your contract is legally binding and you’re protected from any problems with the transaction that could result in your losing your home.
Having an attorney can be a big expense, but it’s an important service. It can also save you time and frustration by alleviating the burden of paperwork and dealing with the buyer’s agent.
Other Fees – A few other common closing costs are re-financing fees, credit report fees, and appraisal fees. These are primarily charged by lenders and mortgage brokers, and they can be an additional expense for you as a seller.
These are not typically negotiated, but they can be a big portion of your closing costs. They’re also a significant part of your selling costs, so it’s worth taking the time to review your options.
Home Inspections – A home inspection can uncover issues with the property that you may want to address before signing a contract. This can cost a bit of money, but it’s an essential part of the home-buying process.
Seller Assistance – Some sellers will offer to pay some of the closing costs for the buyer. This can be an attractive option if you’re selling in a buyers’ market, or if you’d just like to get the deal done and move on to your next dream home.
A seller can also save money by avoiding costly mistakes when buying a home, such as making a false offer or submitting an untrue loan application. These mistakes can tack on a few extra closing costs to your overall sale price, so it’s important to avoid them when possible.