I thought I would write a post to sellers regarding their closing costs because often, when considering selling your home, it is overlooked that you will have costs when selling your property (in addition to real estate commissions). Here is a list of items that could be on your side of the HUD1:
- Broker’s commission as stated above as something you probably already considered, is a full-service fee and will cost anywhere between 6% to 8% of the purchase price BEFORE any subsidies offered to the purchaser. These services include: marketing your property to potential buyers and other agents through signs, print marketing, online marketing through the MLS and other sources, brokers opens and calls to brokers and network, taking calls from, qualifying and showing your property to potential purchasers and holding open houses, (often) staging, giving professional recommendations for a quick sale at the right price and terms, coordinating showings and other contractors, negotiating on your behalf and protecting your interests through the contract negotiation and contractual process…and more… (MORE ON WHAT WE OFFER IN ANOTHER POST…TRUST ME, THE GOOD REALTORS EARN OUR PAYCHECK AND ACTUALLY SAVE YOU MONEY, TIME AND HASTLE)
- Local property transfer tax, county transfer tax, state transfer tax, and state capital gains tax (if applicable) are the charges that you’ll pay for the privilege of selling your home. Credit to the buyer of unpaid real estate taxes for the prior or current year are variable and depend on when you close and when your taxes are due.
- Prorated Fees if applicable: credits to the purchaser for condo or HOA fees, rents, etc. These are items that cover the period of time that you owned the property but haven’t yet paid that the purchaser will end up paying (when they are due) on your behalf. In the case of rents, rent is usually paid in advance, so I you close during the month, you will owe the purchaser the portion of rent for the number of days of the month that they own the property. Similarly, if you have paid anything up front and the purchaser takes ownership during the that time, the purchaser will credit you.
- FHA fees and costs are now negotiable between a FHA buyer and seller. Typically these are paid for by the purchaser.
- Home inspections fees, while in most instances are paid for by the purchaser, are in some circumstances paid for by the seller and include pest, radon and other inspections.
- Miscellaneous fees can accrue from correcting problems noticed during the home inspection. These you will typically fix and pay for prior to closing, but some sellers offer a credit at closing intended to be used for correcting problems.
Your Realtor should provide you an estimate of these costs, so if he/she haven’t, ask for one so that you can prepare accordingly.
Hope this helps and happy selling!