Wednesday, December 04, 2019 / by Elizabeth Sorensen
The number one question looming in a seller’s mind when considering whether to sell their home is, “How much money will I get.” Closing costs for sellers are obviously different than a buyer’s closing costs which are heavy in loan fees. These closing costs vary according to where you live, but as the seller you can expect to pay anywhere from 6 to10 percent of the home's sales price at settlement/closing. This won't be cash out of your pocket, rather it will be deducted from the profit on your home — unless you are selling with very low equity.
Let’s look at a break-down of the expenses you can expect to see on your settlement statement:
#1- Mortgage Pay-off- Unless your home is paid off, you will obviously have an underlying loan to pay-off when selling your home.
#2 Real Estate Excise Tax- Also known as the REET, this amount varies depending on the area.
The Legislature changed the state REET rate for most sales of real property in Washington from a flat 1.28% of the selling price to a graduated rate structure, as follows:
1.1% of the selling price below $500,000;
1.28% of the selling price between $500,000 and $1,500,000;
2.75% of the selling price between $1,500,000 and $3,000,000; and
3.0% of the selling price over $3,000,000.
#3 Agent Commissions- This can vary as well, but expect 4-6% in our area.
#4 Title Insurance- As a seller, you will be required to pay for an owner’s title policy to cover the buyer’s against any future issues with the property’s title.
#5 Escrow Fee-This is the fee both the buyer and seller pay equally to cover the costs of escrow.
#6 Property Taxes- the seller is responsible to pay the property taxes up to the day of closing.
#7 Reconveyance Fees
#8 Recording and Transfer Fees
#7 Miscellaneous Fees- Any liens or special assessments still owing on the property, prorated HOA dues, utility pay-off and any previously agreed closing costs or seller concessions that you’ve agreed to pay on behalf of the buyer.
When I present offers to my sellers, I always give them a “seller-net” sheet in which each offer is broken down and the seller can see the actually net offer once each of these expenses or buyer requests are accounted for. Buyer’s can ask for many things in their offer- home warranties, seller-paid concessions (where the seller pays the buyer’s closing costs as well), HOA transfer fees, repair requests, assumable assessments to be paid in full, and much more. Many sellers don’t know that certain buyer loan types cost the seller more.
Make sure you know every detail of the contract and are clear of the net offer before you accept it.
If you have any further questions about buying or selling your home, reach out to me!
Haven Real Estate Group