Monday, November 11, 2019 / by Connie Tracy
You have decided to sell your home in Spokane and the greater area and have high hopes of getting a BIG return on your home sale. Don't forget to factor in the closing costs for sellers into the sale price.
You maybe estimating that your asking price is $300,000 which will pay off your $200,000 mortgage and allow for a $100,000 profit. Before you start counting your money, you need to calculate the closing costs for the seller.
Of course, seller's closing costs vary according to where you live, but as a general rule-of-thumb, you can expect to pay anywhere from 6-10% of the homes sales price in closing costs at settlement. Don't worry, this is deducted from the profit of the home, so you won't need to pay out of pocket, unless you are selling with a very low equity on your mortgage. In this case, sellers may need to bring a little cash to the table to satisfy the lender and some closing costs may be held in escrow.
The following are closing costs you can expect when selling your home:
1. Seller Costs- This one of the larger closing costs for sellers at settlement is the commission for the Spokane Real Estate agents involved in the transaction. Even though there may be room for negotiation, plan on paying 6% of the sales price for commission. This is split between both the listing agent and buyer's agent.
2. Loan Payoff costs- Most sellers often want a sales price for their home that will pay off the mortgage and satisfy their lenders. Your mortgage payoff balance will be higher than the remaining balance on your mortgage and even the buyers purchase price. This is because of lender's prorated interest of the mortgage. Be sure to talk to your lender about what will be required to pay off the mortgage so you can get an accurate amount and plan for it.
3. Transfer taxes of recording fees- Transfer taxes , recording fees, and property taxes are key parts of a seller closing costs. Transfer taxes are the taxes required by the state to transfer the title from the seller to the buyer. Transfer taxes are part of the closing costs for sellers. Additionally, before the seller can hand over the keys to the buyer, property taxes must be up-to-date.
4. Title Insurance fees- are another fee to keep in mind when you sell your home. Part of the closing costs the seller typically pays for the buyers title insurance premium. Title insurance protects the buyers and lenders in case there are problems with the title.
5. Excise Tax- In the state of Washington, excise tax is 1.28% on all property sales.
Additional closing costs for sellers include liens or judgments against the property, unpaid home association dues, property taxes, and escrow fees. Also, you may want to keep in mind additional costs such as cosmetic repairs or improvements to make your home more appealing to buyers. It is a good idea to keep these in mind as you calculate your closing costs into the sales price of your home.