Are you ready to sell your home? Do not forget about the closing costs. In my earlier blog, I was talking about costs involved to prepare your home for sale. Closing costs are not included into these preparation expenses. Talking about closing costs, you have to keep an eye on the following:
- Real estate agent commission. The big chunk of the closing costs for home-sellers. These can run anywhere between 3% and 6%, and depends on the location, condition of the property, seller’s motivation, condition of the market, etc.
- Lawyer’s fees. They will depend on a law firm that a seller chooses. As average, a seller will be paying between $800 and $1,200 in legal fees.
- Mortgage penalty. It can be another big amount, so read the fine print. Most lenders allow you to apply the remaining mortgage balance to a new property. If you don’t plan to make any real estate purchase after your current home is sold, talk to your lender before to list your home.
- Survey. If there is no survey in your possession, and a buyer (a new owner of you property) required a survey in the agreement of purchase and sale, you are looking to spend $1,000-$1,400 for a new survey.
- Moving costs. It can be a major cost as well. Call moving companies for quotation.
- Home inspection. Usually paid by a buyer, but as an inducement during a sale can be paid by a seller. Costs vary, but usually around $350-$500.
- Status Certificate cost. Usually $100, and as a rule paid by a buyer. Sometimes paid by the seller as an inducement during a sale. This type of cost applies to condos only.
Closing costs for sellers vary according to where you live, but as the seller you can expect to pay anywhere from 5 percent to 7 percent of the home’s sales price. This won’t be cash out of your pocket, rather it will be deducted from the profit on your home. If you are selling with very low equity, you may need to bring a little cash to the table.