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Closing Expenses Related to Selling Your Home
Friday, October 25, 2013
Being aware ahead of time of the costs associated with selling your home can help reduce the sticker shock. Most of the closing expenses will come out of the proceeds at sale which means that your net proceeds probably won't be as much as you anticipated.
Agent commissions. As the seller, will most likely be responsible for paying the full (up to 6%) commission that is split between buyer’s agent and your agent. Commission can sometimes be negotiable with your agent.
Closing costs/credits to the buyer. The buyer may have presented in their offer that you cover some of their closing costs or asked for other incentives (escrow fees, transfer of property, appraisal, title insurance or homeowners dues are some as an example. Since the market has been slow, some buyers are asking sellers to pay all of their closing costs, which generally costs 2%-4% of the sales price.
Transfer tax. Your city or state may have a requirement that the seller pays the transfer tax, this is a low percentage of sales price.
Home warranty. In some cases the buyer asks for it and in others the seller just wants the buyer feel confident about their decision to purchase the home. Some sellers purchase a home warranty policy on behalf of the buyer. This warranty is a service contract which will cover cost of repairs to appliances and some of the major systems of the home for the first year of the new ownership. This costs several hundred dollars.
Capital gains taxes. If you make out less than $250,000 on the sale of the home (or $500,000 for married couples filing joint returns), you do not have to worry. If the sale results in proceeds exceeding these amounts, you may have to looking into it further to determine if and how much this tax will cost you.
Moving. You may want to take advantage of the special treatment of hiring a moving company to pack, load, transport and unload when you move. The most time saving measure for moving costs is to have friends and family assist you.
If you cannot afford these expenses, you may want to consider a we buy homes
investor. A we buy homes
investor can not only save you in closing expenses, they will generally purchase your home as-is and settle the deal often in as little as 30-90 days.