July 29th, 2019 8:29 AM by Jackie A. Graves, President
can often expect to pay some significant closing costs, including real estate
agent commissions, transfer taxes and recording fees.
a first-time home seller, you know how much you owe on the mortgage, and you’ve
got a good idea of your home’s market value. But then come all of the closing
costs you’re responsible for.
Unlike buyers, sellers are usually on the hook for real estate
agent commissions and title insurance. All told, closing costs for a seller can amount to
roughly 6%–10% of the sale price, according to Realtor.com.
estate agent commissions
with the most significant closing cost the seller typically pays, other than
paying off their current mortgage: the real estate agent commissions.
It’s common for
the seller to pay the commission for both the seller’s and the buyer’s agents.
That’s usually a 6% hit to your bottom line — 3% of the home’s selling price to
the agent on either side of the transaction.
a $250,000 home sale, that would amount to $15,000.
And it doesn’t
help to have just one agent involved in the sales process. A single real
estate agent will expect to get the full 6% commission.
Of course, you
can negotiate fees when you hire an agent, but it’s too late to make any deals
when you’re sitting around the closing table handing out big checks.
Among the other closing costs that a seller could expect to
pay is the lender’s title insurance policy,
says Tyler Lee, CEO of Bay National Title in Clearwater, Florida.
Prior to a
sale, a title search is conducted to verify ownership. A title policy protects
the lender (and the new home buyer if they opt to buy a policy of their own)
against unexpected ownership claims that may arise against the property. While
not common, an ownership claim can trigger legal disputes — and the fees that
come with them.
All the closing
costs that are often the seller’s responsibility include:
A property or deed transfer tax.
Any outstanding liens or judgments against the property.
Repairs required following a home inspection.
Real estate agent commissions.
There are additional closing costs that are split between the
buyer and seller, too, including property taxes and any homeowner association
and understand your purchase contract
and whether the buyer or seller pays them, vary widely from state to state —
and even between counties in some parts of the nation.
pays what fee may be negotiable, but many filing and recording fees or transfer
taxes are determined by the state or local jurisdiction.
And as for knowing for sure what’s going to be your financial
responsibility at the loan closing table, there’s only one definitive guide:
the purchase contract.
“Read the contract and make sure you understand what you’re paying
for,” Lee says. “That’s the key.”
Source: To view the
original article click here