Are you planning to list and sell your home for huge profits? You first need to understand common closing expenses for home sellers. These can quickly consume your profits, as you will see below. Be informed and find recommendations below on how to avoid the costs.
It is the most substantial costs you will pay, and you might feel the pinch when paying the sellers commissions. You must fork out about 6 percent of the sales, which is split between the listing agent and buyer’s agent. Let us assume the home sells for $350,000. The commission you pay is $21,000. Keep in mind that you can negotiate the percentages especially when selling a big property.
Home Loan Penalties
If you have sold the home for $350,000 and paid off $200,000 for the outstanding mortgage, you remain with $150,000. Before celebrating, remember that you must pay the penalty for paying off the loan early, before the end of the specified term. Also, you must pay off the remaining debt in full.
Transfer Taxes or Recording Fees
The local government or state imposes these taxes charged for transferring the title of the property to the new owner. You may be charged from 0.1 percent to over 2 percent in some areas. For the sale of $350,000, it can mean paying $350 to about $7,00o.
The seller will purchase the owner’s title insurance. It protects you from claims against the property filed by any party who may want to challenge your ownership. Buyers also must obtain the lender’s title insurance. Sometimes sellers spend thousands of dollars to provide the insurance for the buyer. Although make sure you shop around.
In some places, both the buyer and seller may have separate legal representation, and everyone will pay for their legal counsel. In some cases, only one attorney may be required and based on the area’s code of conduct the buyer or seller pays. Note that the transactions cannot take place without the attorney and this may further dent your profits.
How to Reduce Costs
The only way to reduce substantial costs may involve selling the property on your own. However, you must research extensively before listing your home. Similarly, you may have to spend money to have the property correctly appraised. Overall, you might need the agent even after putting measures to prevent costs. Also, negotiate for lower commissions.
Selling Your Home to Cash Buyers
If you need to sell your home today, contact us. We are not like agents and have no commissions. You will forgo paying agents’ fees and expensive title insurances. What is more, you can receive cash in seven to ten days.
Contact us and instruct us to visit your home. You do not need to make any repairs or touch-ups. We visit your home only once for evaluation. Next, you receive a nice cash offer. It is a convenience at its best.