Home Seller Closing Costs ???
Closing Costs decrease your net at closing which impacts what you need with the down payment, Purchase Price & Closing Costs on your Next Home.
Typically fees include items like brokerage fees, government recording fees, title insurance and real estate taxes and some fees can be impacted by the many types properties. Learn about these fees below.
Usually, this fee is represented as a percentage of the sales price and is shared between the listing broker and the buyer’s agent. The amount of this fee is generally 7% and is typically shared equally with the Buyer’s Agent. As home values increase above $300,000 the amount of commission may decrease to 6% or even less for very expensive homes. While some discount real estate brokerages may offer lower rates be sure to fully understand what if anything you are waiving in the way of services, expertise, marketing etc. in return for the lower commissions. Also be sure to have the Agent include in the listing agreement what portion of the commission will be shared with Buyer’s Agents.
Many Brokerages also charge a Transaction or Commission related to Document Management for the sale. With Mitch this amount is $179 and is only paid when you close on the sale of your place.
There are typically two title insurance policy’s. Both are one-time premiums are usually based on the purchase price. One is typically provided at an expense to the seller showing that the seller has the ability to sell the home without any issues. The second policy is for the benefit of the lender who is extending a new mortgage and is typically paid by the buyer.
The amount of title insurance will vary based on the purchase price of the home. Below lists some typical amounts
Purchase Price Seller’s Title Fees
$100,000 $ 650.00
$200,000 $ 830.00
$300,000 $ 940.00
A closing protection letter (sometimes “insured closing letter” or “CPL”) forms a contract between a title insurance underwriter and a lender, in which the underwriter agrees to protect the lender for actual losses caused by certain kinds of misconduct by the closing agent. Examples would be failure to follow written closing instructions or fraud or dishonesty in handling the lender’s funds or documents. The typical cost for the CPL is $25-$45
Typically most Sellers will pay taxes on the property for when they owned it. So, this means that sellers will almost always owe taxes at closing that often times might not even have been billed by the taxing authority yet. In some instances the Buyer’s lender may require these taxes be paid at closing to the city while at other times, since there will be enough time for the Buyer to escrow or build up the amount that will be due, the lender will allow these taxes to be given to the buyer in the form of a Credit against what the buyer would otherwise bring to closing.
As a general rule the amount of this expense, on homes being resold, will be either just over or just under a full year’s worth of real estate taxes.
Keep in mind that when the Seller pays closing costs for the Buyer the home must now appraise for the the total purchase amount INCLUDING the closing costs for the Buyer. If a Seller got top price for a home and then agreed to pay closing costs for the Buyer on top of that top price the odds are good that the home will not appraise for the total amount. If the Buyer does not have the funds to cover the closing costs, when this happens, then this could kill a purchase.
Home Warranty plans provide for specific types of coverage, be sure to fully evaluate the coverage in each policy before selecting a plan. Typically:
- If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
- The home warranty company calls a provider with which it has a business arrangement.
- The specific provider calls the home owner to make an appointment.
- The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
- The home owner pays a small deductible usually $75- $100.
Home warranty plans will run $350 – $600 with most plans costing $400 to $500. Most Buyers will ask for the Seller to pay for the plan but like many things this is 100% negotiable.
This fee is typically shared equally between buyer and seller but is negotiated as part of every purchase agreement.
After you close on the sale of the property contact the Insurance firms and cancel your coverage(s) on the property. You will need to give them a new address and they will send you a refund check for any unused insurance premiums. The amount can vary based on the time of year you sell the property vs. the anniversary of when you first closed. If you are just past your anniversary date the amount of refund will be larger than if you are just before your anniversary date.