Selling a home takes time. You’ll likely want to work with a realtor to get your home listed and marketed. In most cases, there will be open house showings, a property appraisal and offers to consider. Once you’ve accepted an offer, the home will be inspected and you’ll work with several other parties until the closing is complete.
Home sellers are also usually expected to pay part of the closing costs for the transaction. These costs can vary according to the type of home that is sold and the area where you live. Most closing costs for home sellers are around five to ten percent of the home’s sale price.
If you’re selling a home in Utah, you should be able to still sell your home successfully in a reasonable amount of time. Just make sure that you budget appropriately for the closing costs that you’ll be responsible for before the transaction is complete.
Here’s a quick breakdown of closing costs for home sellers:
1. Real Estate Agent Commission
Home sellers usually pay commissions to their realtor. Commissions from a home sale are usually about one to four percent of the total sale price.
That figure can vary, and it’s something that can be negotiated with your realtor where appropriate.
Sellers are also responsible for paying the commission for the home buyer’s real estate agent.
This amount is typically around one to three percent of the buyer’s asking price for the home
2. Title Insurance
Title insurance policies protect homeowners against any possible claims against their property. This can come in handy if there are government, creditor, or contractor liens on a home or if other disputes should arise.
Title insurance helps homebuyers avoid these and other issues both now and for as long as they own the house.
In many cases, home sellers pay for title insurance policies. These policies can range in price from $1,000 to $5,000 or more.
Reissue rates are usually available for people who have owned and lived in their homes for ten years or less. Rates are typically lower for reissued title insurance policies.
3. Escrow Fees
Escrow fees are often split evenly between home buyers and home sellers.
These are the costs of holding on to the funds used to buy the property and the recording and signing the deed tot the home and other associated property documentation.
Notary charges, document copying fees, office expenses, fund transferral fees and other charges may be included in escrow fees.
This charge is usually either around one percent of the home’s sale price or a flat rate. Most of these flat fees do not typically exceed $2,000. Escrow fee amounts can vary from state to state.
5. Attorney’s Fees
In certain states, an attorney is required to attend a home sale or purchase. They are currently mandatory in 21 US states and the District of Columbia.
Utah does not presently require home buyers or sellers to have an attorney present at a home sale.
You can decided whether or not you want to involve an attorney in the transaction.
They are usually called in to assist with more complicated sales, including sales of inherited property or homes that are in desperate need of repair.
In those instances, the attorney would be paid from the sale proceeds at closing. The amount they receive will depend on any agreements that are made during the sale process.
6. Homeowners Association Dues
If you live in a townhome, condo or other homeowners association, you”re probably used to paying regular homeowners association fees.
These fees can be assessed monthly, quarterly or yearly. They cover maintenance of common areas, landscaping, snow removal, and have been used to pay utilities in some cases.
You’ll be responsible for paying all homeowners association dues right up until the closing date.
Some associations may charge a transfer fee for moving the dues from one party to another. The amount of the transfer fee will depend on the homeowners association’s bylaws.
7. Property Taxes (Prorated)
All states charge some form of property tax for residential property that is owned. These taxes are usually due twice a year. The amount will vary according to the state that you live in.
Property taxes can either be paid directly or they can be taken out of an escrow account’s funds.
Home sellers are typically responsible for any and all property taxes until the sale date. From there, the home buyer will then be responsible for paying property taxes on the home.
8. Closing Cost Credits (if applicable)
This isn’t really a fee. It’s a credit that some sellers may make to convince a home buyer to agree to a deal.
These credits are frequently referred to as seller concessions or seller assists. Some sellers may choose to offer interested parties a credit towards their closing costs.
These credits reduce the amount of closing costs that a home buyer will need to pay.
It also lowers the amount of money that they’ll need to have saved for the closing. Home sellers can expect to see this credit in the closing documents.
These are the most common closing costs and line items that home sellers should anticipate.
Other fees and charges may be assessed on a state by state basis. Talk to your realtor if you have any questions or concerns about this process.
Closing costs are the last major expenses that home sellers should see. Once they are paid and the closing documents are signed and recorded, you’ll receive your check for the sale.
You can put those proceeds in the bank or put them toward the purchase of another home or other investment. You can finally move forward with the next phase of your life.
Have Questions? Ask Becky!
Give Becky Nay a call today at 801-573-2077 to learn more about local areas, discuss selling a house, or tour available homes for sale.