Estimate of Closing Costs for Sellers

The closing costs are fees associated with selling a home. There are fees normally paid by the seller and buyer when closing on a property. Some costs are negotiated.

Seller Closing Costs

When seller’s have yet to pay off their home, the seller’s most important closing cost is satisfying the remaining balance of the loan.  During the escrow process, the escrow officer will inform the seller’s lender the amount needed to close the loan.  After the loan has been paid off along with other fees, the seller will receive any proceeds from the sale.  Here are some typical seller closing costs:

  • Broker’s commission
  • Transfer taxes
  • Documentary Stamps on the Deed
  • Title insurance
  • Property taxes (prorated)

Negotiating Closing Costs

Most of the time, not only do sellers and buyers include sales price in negotiations, but closing costs as well. Negotiated expenses can range from high to low cost items. Let’s say the seller is worried about the termite condition of the home.  The buyer may agree to pay for the termite inspection or even for termite repairs.  Most items are negotiable as long as the other party agrees to the written terms in the purchase agreement.  When negotiating closing costs, tax advantages should be a consideration.

Prorated Fees

Some fees are prorated between buyer and seller at closing. Commonly, property taxes are prorated because taxes are paid annually at the end of the year. So if a house sold in June, the property’s taxes are prorated for half the year. Since the sellers have lived in the property from January to June, the sellers credit the buyers with half of the taxes at the closing.

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