When you’re selling your home, you’ll end up paying a bit of cash on closing day for closing costs. But what are the most common closing costs for sellers, and how much will they cost you?
Here’s what you need to know.
Common Closing Costs for Sellers
Check out these common closing costs that sellers often have to pay before the transaction on a home is complete:
- Real estate commissions
- Loan payoff costs
- Transfer taxes or recording fees
- Title insurance fees
- Attorney’s fees
Here’s a closer look at each.
#1. Real Estate Commissions
Usually, real estate commissions are about 6 percent of a home’s purchase price. That means on a $100,000 home, closing costs would be about $6,000. The agents who handle the transaction and their brokers are the ones who receive these fees, which are usually split down the middle.
#2. Loan Payoff Costs
Your mortgage payoff balance is most likely going to be higher than the remaining balance on your mortgage – and it could even be higher than the buyer’s purchase price. That’s all thanks to the lender’s prorated interest on the mortgage. If you have to pay a prepayment penalty for paying off the loan before the end of its term, or if you have a home equity line of credit, you can expect to handle those on (or before) closing day.
#3. Transfer Taxes or Recording Fees
Transfer taxes, property taxes and recording fees are usually a seller’s responsibility. Transfer taxes go to your state or local government to transfer the title from you to the buyer.
#4. Title Insurance Fees
Sellers usually pay for title insurance for buyers, but not always. You should talk to your real estate agent about whether this is something you’re going to do, too.
#5. Attorney’s Fees
If you have an attorney representing you or handling parts of your transaction, you’ll most likely have to pay his or her fees as part of your closing costs.
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