What will it cost me to sell my house?
Sellers are responsible for brokerage commissions and costs associated with transferring the deed.
Brokerage commission is typically 6% of the sale price, with 3% going to the listing broker and 3% going to the broker who brings the buyer. Other costs include title insurance (+/-.0067 of the selling price), State documentary stamp tax on the deed (70 cents for every $100 of the selling price), courier fees (+/- $100), Closing Agent fees (+/- $500). In addition, the seller may have to pay for certain repairs to the property prior to closing, as agreed in the contract (often up to $1,000). So a typical total of closing costs on a $200,000 property would estimate around $16,000.
The seller will usually have to pay a certain amount of property taxes to the buyer (depending on the time of year), to represent the prorated amount of taxes for the months that the seller owned the property. This is because when the property tax bill arrives in November, it is for the previous year and the buyer will have to pay for the entire year, including for the time the seller owned the property, so the buyer receives a credit for this at closing.
Also, most neighborhoods have HOAs (homeowner associations), who are required to provide estoppel letters to the title companies prior to closing. Most HOAs charge fees for this, as much as $500. Many neighborhoods have two different associations, so fees must be paid to both for providing the estoppel letters. Sellers are usually required to prepay these fees before the HOAs will release the estoppel letters.
This all may seem like a lot of fees to sell your home and many sellers are understandably anxious about that, especially when it comes to the largest part, the brokerage commission. However, when it comes to handling the marketing and sale of what is, for most of us, our biggest investment, your Realtor is definitely worth the expense. Most people who try this on their own end up giving up fairly early in the process and hand their sale over to a Realtor. As a matter of fact, most savvy Realtors even pay for other Realtors to handle the sale of their own personal property!
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