One important thing to account for when determining the profit from the sale of your home is the closing costs. Overall, the fees can account for up to 10% of the price of your home in Seattle. Sellers are typically responsible for commission fees to the real estate agent, while the closing costs typically fall on the shoulders of the buyer.
One mistake we often see sellers make is the under or overestimation of selling costs. Closing costs can change immensely depending on the state the home is sold in and procedural methods used. However, you can predict your closing costs with a greater understanding.
If we take real estate agent commissions out of the pot for a second, the selling costs typically sit anywhere from 1%-3% of the overall price of the home. Do note that those percentages do not include any associated preparation costs.
You may need to do repairs or renovations, which can easily cost you thousands of dollars. Additionally, you may choose to stage your home. In 2019, the median cost of staging was $400.
The main question is, who pays the title insurance, transfer tax, or attorney fees?
What Are Closing Costs?
Closing costs are any costs relevant to the sale of real estate. However, it is important to note that they are typically not associated with real estate agent commission fees. Here are a couple of things you will likely find in your closing costs:
- Title Insurance: Title insurance protects lenders and buyers from legal problems that the title does not reveal. The buyer will usually pay for the policy premium of the lender while the seller will pay for the policy premium of the buyer. On average, you can expect to spend $1,000.
- Title Search: A title search allows the buyer to verify property ownership, as well as see if there are any liens on the title. On average, the buyer will pay anywhere from $300 to $600 for a title search.
- Appraisal: Appraisal reports typically cost anywhere from $450 to $650. More often than not, the buyer will pay for the appraisal, as it is a cost associated with the approval of a mortgage loan.
- Home Inspection: Home inspections typically cost upwards of $500. An inspector will come in and inspect your home, taking note of any major problems that would impact the decision of the buyer. However, many buyers choose to double down and pay for their own inspectors.
- Credit Check: Lenders need to get credit reports from the three major credit bureaus when a buyer tries to take out a loan. Acquiring these credit reports will cost anywhere from $20 to $50, though sellers don’t need to worry about it.
- Property Survey: A property survey document shows the lender where your property lines lie. To get a loan, this document is usually necessary. A buyer will typically pay around $500 for a property surveyor.
Beyond all of that, there are plenty of other additional costs that you may need to consider when closing, including loan fees, transfer tax, recording fees, escrow fees, and other outstanding costs, including utility bills, HOA fees, etc.
To avoid having to deal with closing costs altogether, you may want to consider getting an offer on your home from HelloPad. Get in contact with us to learn more.