Most everyone knows that when there is a sale of property, there are going to be some expenses that are associated with it for both the buyer and the seller. Most often people are aware of the costs involved with buying as mortgage lenders will provide a good faith estimate to buyers as part of the steps of being prepared for the closing. However, on the selling side there can be more of a gray area about the closing costs that a seller will have to pay other than any realtor commissions. Here is a closer look at seller closing costs as we provide a more clear understanding of what is to be due.
When you hire an agent to list and sell your home, they will inform you of the percentage that they charge to market and sell your home. In today’s market this will range between 5 and 6% of the selling price. You can calculate this dollar figure based on what you estimate your home will sell for.
For everyone that has a mortgage on their home that they are selling, there will be a cost to pay it off during the transfer. This is essentially the fees to process the payoff as well as any interest due on the loan for the days of the month that you are closing in that you own the home. Processing fees are typically negligible fees to be paid where interest due will range depending on your loan details and which day of the month that you are closing on.
Homeowner Association dues and real estate taxes
Depending on how you pay your property taxes, you may pay in one year for the previous years taxes as these are usually paid in arrears. The amount you owe will depend on when you sell. Homeowner association (HOA) dues can also function in a similar fashion. You will owe the portion of the quarter or days of the month that you own the property for.
Transfer tax and recording fees
Your state and/or county will also charge a fee to collect revenue in the way of tax stamps. This tax is typically set at a dollar amount per thousand to calculate. As this can change, it is best to check with your particular county on what the current rate is, then multiply it by your estimated sales price. There will also be a recording fee for the property and mortgage deed to be entered,but this is often the buyer’s responsibility to pay.