Your Home Selling Costs BREAKDOWN

Dated: November 10 2020

Views: 186

Have you sold your house but are curious as to how much it's going to cost you? In this video, we're going to walk you through exactly how much it costs to sell a home in this market. By knowing your closing costs up front, you’ll have more negotiating power and will understand what your bottom line is at the end of a successful sale. The truth is, it doesn't matter what your house sells for, it matters what you walk away with.

Common Seller Closing Costs

Selling your house can be stressful, as you have to deal with packing all your things and moving to new surroundings. What's even more stressful, however, is selling your home without knowing how much it's going to cost you. We’ll talk about some common closing costs that you can expect when selling your home.

Title Insurance

The first item you're going to see on your net proceeds sheet is going to be title insurance. In our area, it can cost anywhere from $800 up to $2,500, depending on the transaction. Title insurance is used to make sure we are conveying a clear and marketable title to the buyer. Any chain of ownership issues in the past will have to be cleared up through the title company's work and clearing title.

Let’s illustrate this with an example. When you buy a new car, you buy it with a clear and free title. It's the same thing when you buy a house. We just want to make sure that 40 years ago—when that house was sold—that if it was supposed to have uncle Ted's signature on it, we have uncle Ted's signature on it. It’s important to verify that ownership was transferred fully and legally.

Real Estate Property Taxes

The next line item you're going to see on your net proceeds sheet is real estate property taxes. Here in Shiawassee County, we pay our property tax bills in advance. A tax proration at your closing would mean that, as a seller, you get back your unused tax portion and the buyer has to pay to catch up on that unused portion.

State Transfer Tax & County Revenue Stamps

Another line item you're going to see on your net proceeds sheet is the state transfer tax and county revenue stamps. Let's face it: this is simply local Uncle Sam getting their piece. Here in mid-Michigan, the total cost for the combined two taxes is 1.86%.

Existing Loan Payoffs

The next line item you're going to see is any existing loan payoffs. If you carry a mortgage or even a home equity loan, the payoff amount is going to go on that line.

Realtor Commissions

Wouldn’t it be nice to know what your commission goes towards? Your commission in a real estate sale—on the selling side—goes towards marketing: the video content, photographs, staging advice, pre-listing inspection advice, and coordination of all of these. In addition, searching for the right buyer, putting them under contract, negotiating on your behalf, and coordinating all of the details that go into closing a real estate transaction are part of that commission. 

Total Seller Closing Costs

When all of these fees and costs are added up, your closing costs in selling your home will average between 8% and 10% of your home sale price. I hope this helps you understand some of the expenses you’ll have when selling your home. I strongly recommend getting a net proceeds estimate upfront, allowing you to walk away with stronger negotiating power and a clear picture of what your proceeds will be at the end of a successful sale.

If you would like a net proceeds sheet on the potential sale of your home—or have any other questions—please reach out and I’ll be happy to connect!

 

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Jeff McIntyre

For nearly 16 years Jeff has served the Greater Shiawassee Area through his real estate business and volunteering his time. Recently Jeff acquired his broker's license and along with his wife Missy,....

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