What Are My Closing Costs When Selling a Home?

Our last post discussed closing cost breakdown on the buyer’s side of a real estate sale. But what closing costs can you expect when selling a home? The seller’s side of the Closing Disclosure form typically has fewer line items than that of the buyer, but the costs vary based on a number of factors.

Seller's Closing Costs

The two portions of seller’s closing cost having the most impact on the bottom line are the agent(s) sales commission and mortgage payoff balance. Though paid at closing out of the proceeds from selling your home, we’ll leave these aside when discussing fees associated with seller’s closing costs. Total seller’s closing costs typically average between six and 10 percent of the sale price, as reported by Realtor.com.

Understanding Seller’s Closing Costs

Here’s a breakdown of typical closing costs incurred when selling a property:

  • Loan Payoff Fee: Covers the cost of forwarding the loan payoff to the lender.
  • Lien or Judgment Releases: Settles any liens or judgments against the home.
  • Termite Letter: Covers the cost of a termite inspection. A termite inspection and letter are generally conducted and submitted prior to closing.
  • Home Warranty: The purchase of a service plan that covers the cost of repairing or replacing major systems and appliances in the home you are selling in the event breakdowns, damage or loss occurs. (This coverage typically lasts for one year after closing.)
  • Home Repairs: Often appear in the form of a credit to the buyer to cover the cost of any necessary (pre-negotiated) home repairs.
  • Homeowner Association Fees – Prorated based on the amount owed at closing. (If paid in full or through a date beyond closing, these amounts are prorated back to the seller and paid by the buyer.)
  • Condo/Co-op Fees: Also prorated based on the amount owed at closing. Like HOA fees, any amounts paid for in advance for time beyond the closing date are prorated back to the seller and paid by the buyer.
  • Property Taxes: This amount is prorated based on the percentage of the year the seller owned the property.
  • Deed Preparation Fee: Applies to the document composed to transfer title on the property from the seller to the buyer.
  • Storm Water Fee: Varies per city, and is charged to cover the cost of treating, storing and managing storm water runoff within the community.
  • Grantor’s Tax: Transfer tax paid to the state, which covers the cost of conveying the property from the seller to the buyer.
  • Notary Fee: Fee charged to verify signatures on closing documents. This typically applies if the seller is not local to where the transaction occurs.
  • Settlement Fee: Paid to the company or attorney conducting the closing and covers the cost of preparing documents and executing the transaction.
  • Seller Concessions: Paid by the seller on behalf of the buyer to cover the cost of certain closing fees. These amounts or items are negotiated prior to closing.

*These fees may vary based on state, city and county, and per mortgage product. Some may not be applicable, depending on the circumstances surrounding your closing.

Learn more about closing costs and the settlement process by contacting our friendly, knowledgeable team today! Call Linear Title & Escrow at (757) 340-0340 for additional information.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s