Costs of Selling a home
There are costs associated with selling a home. I am including some common fees that you may encounter during your transaction.
- Settlement: This fee is paid to the settlement agent or escrow holder. Responsibility for payment of this fee can be negotiated between the seller and the buyer.
- Document Preparation: This fee covers the cost of preparation of final legal papers, such as a mortgage, deed of trust, note or deed.
- Notary: This fee is charged for the cost of having a person who is licensed as a notary public swear to the fact that the persons named in the documents did, in fact, sign them.
- Attorney fees: Both the home buyer and the seller might have their own legal representation to prepare and record legal documents. Frequently, however, where an attorney is acting as a settlement agent, there may only be one involved in the closing. Who pays for those services is a matter of contract negotiation.
- Recording fees: These fees may be paid by the buyer or the seller, depending upon your agreement of sale. The buyer usually pays the fees for legally recording the new deed and mortgage.
- Revenue/Excise Tax: This tax is collected in some localities whenever property changes hands or a mortgage loan is made, this is based on a percentage of the sale price. In Mecklenburg county, this is .2% of the sale price.
- Property taxes: If you have paid the property taxes for the year already, the buyer will give you a credit for the pro-rated amount of taxes due from closing until the end of the year. If you have not already paid the tax, you will give the buyer a credit for your portion of the taxes from the 1st of the year through the day of closing.
- Home warranty: Fee for an insurance policy to protect buyer from cost of unexpected failures to the major systems and appliances in the home. This is sometimes an item that the buyer requests the seller to pay in the contract. If you expect you will be asked to pay for this, it is sometimes helpful to purchase the warranty when you list the property, as some warranty companies will start the policy at that time, and you can utilize it if something breaks in the weeks before closing.
- Real estate commission: This is the total dollar amount of the real estate broker’s sales commission, which is usually paid by the seller. This commission is typically a percentage of the selling price of the home. It is generally split 50/50 by the buyers agent’s firm and the sellers agent’s firm.
- HOA Transfer/Capital Contribution Fees: These are fees charged by the HOA, generally to the buyer, to transfer the property over to the new owner. It helps to move the transaction along, if you have disclosed these fees to the buyer in your property disclosure.