Have you decided to sell your house but are wondering how much it’s going to cost you? With all of the packing, moving, and adjusting, selling your house can be stressful. What’s even more stressful, however, is not knowing how much you’re going to pay. In this video, I’m going to walk you through all the costs associated with selling your home. By knowing what your closing costs are upfront, you’ll have the upper hand in negotiations and will know exactly how much you’ll walk away with at the end of your sale.
How Much It Costs To Sell Your House
The most important number you need to know when selling your house is not just what the buyer pays for your home. Surprisingly, its the amount of money you put in your pocket when you walk away from the transaction. To better understand what this number will be, you’ll need to consider some common closing costs.
One of the first closing costs you’re going to see is title fees. These fees are essentially what you’re paying the title company to change the title over to a different name. This includes any fees and taxes associated with that switch, such as unpaid liens. In short, this process changes the name on the property from who used to own it (you) to who’s going to own it now (the buyer). Wherever you buy property in the United States or Canada, there’s going to be title fees. It’s an inescapable part of the process.
Tax Proration Fee
The next fee you’re going to see is a tax proration fee. I personally learned about this the hard way when seeing an unexpected, large fee on my home sale. The tax proration fee is the amount of property taxes that are left during the calendar year period that you, the homeowner, haven’t paid yet. You will be responsible to pay your taxes up until the day you own the property. From that day moving forward, the property taxes will be the burden of the buyer.
The tax proration fee is calculated out daily, and it ensures that you pay up until the day that you close. After that, you’re done. You can walk away, and everyone’s happy.
Another fee you’ll be responsible for is the transfer fee. This is a county tax, usually calculated as a certain dollar or percentage per every $1,000 of the purchase price. This fee goes towards a variety of county line items that your taxes pay for—and that comes from property sales. One of the biggest items you’ll see on your closing statement (or prepared seller net sheet) is going to be your loan payoff amount. If you’re lucky and don’t have much left on your loan, it will be small. If you have more, it will be the amount of your unpaid mortgage balance.
Real Estate Commissions
If you decide to hire a realtor, the next fee you should expect is the commission for your realtor. The seller actually pays for both the buyer’s and seller’s side of commissions. This then gets split evenly between the buyer’s broker and the seller’s broker. When you purchase a property, you don’t have to pay commissions.
Included in the realtor commissions on the seller’s side is everything that’s needed to sell your home. All the activities in the pre-listing stage—including photography, videography, drone photography, print marketing, and internet marketing—will be covered, as well as a portion for the buyer’s agent. The commission fees will be consolidated into a single line item.
Your Total Seller Closing Costs
Once you subtract all seller closing costs, you’ll then have a number that will be your walkaway total profit. From the sale price of your home, you’ll need to account for commissions, tax prorations, and all the other fees we discussed. In real estate, everything is based on a percentage of the sale price. The higher the sale price of the home, the more the closing costs are going to be as well.
If you’d like to get an idea of what it would cost to sell your home, please feel free to contact me. I’ll be happy to give you a seller’s net sheet so you can see what your bottom-line, walkaway take-home figure will look like. This will give you the best idea of how much money you’ll keep in your pocket after you sell your house!