What Are the Seller Closing Costs?
Congratulations! You’ve made it to the final process of home-selling. Closing on a property can be one of the most rewarding things as a seller, but can also be a tough one if you aren’t equipped with knowledge. The is one of the most expensive states when it comes to closing costs. There are several regulations that also makes it one of the most tedious states. As a For Sale By Owner (FSBO) seller, we assume you are ready for the closing. Our comprehensive FSBO Home Seller Guide will assist you to accomplish exactly that.
What Are the Different Home Seller Closing Costs?
- Mortgage Payoff: (fee varies on your lender) One of the most important items in your list of fees is the mortgage payoff. If you haven’t paid this off, now’s the time to pay the remainder. This includes items such as the recording fee, principal balance, interest accrued from the last payment, or any statement fee the lender might charge.
- Real Estate Broker Commissions: TIn, commission fees usually are in the average of 6%—generally 3% of the fee going to the listing agent and the other 3% to the buyer’s agent. The seller’s closing costs can go around 5% of the purchase price if the property is anywhere near the average home sale in the Twin Cities. If you’re selling FSBO via Houzeo, congratulations… You’ve likely saved thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.
- City Transfer Taxes or Stamps: Also referred to as deed taxes. The state typically issues transfer taxes to handover your property’s deed to the new owner/buyer. You are charged 0.33% of your home’s price. Furthermore, Ramsey counties are charged for an extra 0.01 due to the Environmental Response Fund or EFR Tax. The collected fee goes to the county treasurer, which means 97% goes to the state general fund. While the rest of it goes to the administrative expenses.
- Property Taxes: These are outstanding payments, or prorated property taxes, utility bills, or homeowner’s insurance that are all tied into your property. You may need to pay the buyer a prorated amount of property taxes, or the buyer may need to credit you.
- Title Insurance: The title insurance policy provides buyers the protection from any financial loss or unexpected problems with the property. It’s a complete guarantee that the purchaser gets a clear title to the property, free of other legal encumbrances that could threaten the buyer’s interest in the property. Sellers usually pay about $1000 for the title insurance.
- Attorney Fees: During the closing process, attorneys play a vital role—from preparing all the documents to taking care of essential contracts. Attorneys could either charge by the hour or a one-time fee. You’ll be charged for at least $1000 for all the services and paperwork.
- Escrow Fees: There can be a neutral third-party representative from an escrow company that handles the transfer of the deposits, documents, funds, and other key items in a closing. Usually, escrow charges $2 per $1000 in the sales price, which covers the services during the closing day.
- Property Survey: Home surveys in typically cost $450 to determine the boundary of your property, and so the buyer could get an assurance of what they’re actually paying for.
- Seller Paid Home Warranty: Some homebuyers often ask for a home warranty, a fee that covers the cost of home repairs in case of damage. The average cost can be around $300 or more, varies upon the area, coverage, and the insurance company.
- HOA Dues and Document Fees: If the property falls under a Homeowners Association, you may be subject to various other charges. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow
- Home Inspection: Costs around $286 to $383, the home buyer can request and perform a house inspection to know any major issues or flaws with the property.
- Recording Fees: In order to document the sale and transfer of your property to the public record, you have to pay for a fee that could vary depending on the county you’re in.
- Special Assessment Search: It’s a charge imposed on the property for a local improvement that benefits the property. “Special assessments are one of the ways a local government may collect money to pay for local improvements.