At the end of the real estate transaction come the closing costs. For seller costs, this can come to a significant amount of money on the closing date. However, the more you know about how closing costs are calculated, the better prepared you'll be for completing your home sale. Here are the most important things to know:
How do I calculate closing costs?
Closing costs for sellers vary based on multiple factors. Luckily, there are plenty of online calculators and other tools available for estimating your total closing costs. You'll need to combine property taxes, closing fees, title insurance fees, escrow fees and attorney fees with commissions paid to real estate agents.
Should you pay the buyer's closing costs?
Sometimes a seller can offer to cover the whole closing costs for the purchaser. This can help you win over a potential buyer in a competitive marketplace. A purchaser can ask for concessions in exchange for completing negotiations.
In some cases, buyers may ask for an offer to cover an issue found in a home inspection. Talk to your sales agent to find out if there's an alternative option to match your goals.
Average closing costs for sellers
Closing costs will vary from one sale to the next, but sellers can typically expect to pay around 8% to 10% of the home's total sale price. The largest part of this percentage comes from real estate agent commissions, which can be as high as 6% of the purchase price. Other cost variables include local tax rates, homeowners association fees, legal fees and title insurance fees.
When are closing costs due?
Your total seller closing costs will be due when you sign your final loan documents on the closing day. Make sure to have everything prepared to complete the transaction, as delays in closing can end up costing you more.
Once the seller pays closing costs and all the paperwork is signed, the sale is considered completed. Keep these basics for how and why sellers pay closing costs, and you'll be better prepared for every step of the process.
About the Author
Carolyn Ross
Carolyn Ross spent her career in the advertising world as a commercial photographer. She is no stranger to meeting challenging deadlines and working with many people in a fast paced environment.
She has shot for various magazines such as Architectural Digest, Boston Globe Magazine, Wellesley Weston, South Shore life as well Boston Magazine to name a few. Her love of homes and visual spaces has evolved through the years and has lead her to expand her career. She currently serves on the board of a national organization: The American Society of Media Photographers for the New England chapter. She has been involved in the school art programs as well as teaching photography classes.
Carolyn's expert knowledge of staging and art direction is what differentiates her from other agents. She has also taken her keen business background and artistic talents to successfully renovate numerous investment properties in the Metrowest area over the last several years.
This is what inspires her and with determination and passion, she will bring these unique skills to your next real estate transaction.
