When working with an agent, one contributing factor of closing costs for sellers at settlement is the commission for the real estate agents involved in the transaction, between seller and listing agent.
Loan Payoff Costs
Your loan payoff will often be a slightly higher than the remaining balance on your loan because of prorated interest. In some cases, you may have to pay a prepayment penalty for paying off your loan before the end of the term. If you have a home equity loan or line of credit, this must be paid in full at settlement as well. Speaking with your current mortgage company will give you a better sense and deeper analysis. We always encourage to reach out prior to even listing your home, to make sure you are fully prepared and understand the payoffs and different scenarios.
Transfer Taxes or Recording Fees
These are the taxes imposed by your state or local government to transfer the title from one owner to another. This may vary depending on specific use case.
Attorney or Escrow & Title Search Company
Market traditions vary, so while in some areas both the buyers and sellers have their own attorneys, in others it's more common to have one settlement attorney for the transaction. In some areas the buyer pays the attorney fees, while in others the seller pays. The standard practice in Massachusetts, buyer & seller parties will have their own attorney.
Title Insurance Fees
Sellers typically pay the owner's title insurance premium. Make sure the title is "free and clear" of any issues as well.
Additional Closing Costs for Sellers
Additional closing costs for sellers include: liens or judgments against the property, unpaid homeowner association dues, prorated property taxes and homeowner association dues included up to the settlement date. Your agent and/or seller should be preapred to have paid off up to instructed timeline for HOA dues. This can be overlooked, and is very important when selling a condominum with HOA dues.
Depending on the contract, closing costs may also include termite inspection and remediation, if necessary, a home warranty premium and repair bills or a credit for repairs for items found during a home inspection.
Do not forget to estimate some of the closing costs associated with preparing to sell, such as cosmetic repairs or improvements to make your home more attractive to buyers. Those costs may be returned with a higher sales price, but you should still include them in your calculations. This will vary depending on what needs to be done, and what you choose to renovate or fufill.
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