Closing Costs and Fees Paid by Home SellersBy Teresa Cowart in Blog,For Home Sellers. Tagged: Closing Costs • Home Sellers • Real Estate • Real Estate Closing • Teresa Cowart
Many people associate closing costs with buyers, but sellers too are responsible for a portion of these costs. In addition to paperwork and carefully reviewed contract agreements, knowing a good estimate of your closing costs are also important for a successful closing.
Outlined below are the general costs and fees sellers may pay in a real estate transaction.
Real Estate Commissions
When a seller choose to work with a realtor to help them sell their home they will be responsible for paying the realtor’s commission.
If the buyer gets the home inspected and issues arise, the seller has to pay the repairs unless otherwise agreed in the contract.
Title Insurance Fees
Both sellers and home buyers pay these fees. The seller pays for them to prove to the buyer that the title is clear. The buyer pays a title insurance fee to prove to their lender that the title on the home they want to purchase is clear.
When a title is transferred from one party to another, taxes can be issued. The seller is to pay these taxes.
In the span of time between the contract agreement and settlement, the seller is in charge of paying for mortgage interest. Once settlement is complete and the property is in possession of the buyer, the responsibility of interest payment switches to the buyer.
Any fees associated with notarizing various documents in the real estate transaction will be paid by the seller.
Similar to mortgage interest, any property taxes (including back taxes) until settlement, will be paid by the seller.
If the seller has a loan that issues a fee to pay off the balance early, the seller is in charge of paying that fee.
The above are many but not all the fees that a seller may be responsible for. Buyers also can try to negotiate that the seller pay the buyer’s closing costs as well. If the seller agrees it would be considered a seller concession. It’s worth noting some lenders have limits on seller concessions. It may seem like a lot of fees to pay just to sell your home, but keep in mind sellers have some great tax benefits as well!
Additional reading on buyer and seller closing costs: Realtor.com
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