Are you thinking about selling your house and are curious how much it’s going to cost you? In this video, I’m going to walk you through the closing costs of selling your home. By understanding your numbers up front, you’ll have the upper hand in negotiations so you can get the best deal.
Common Seller Closing Costs
Selling your house is stressful, especially when you think about packing, unpacking, and getting to know the new neighborhood. What’s more stressful, however, is not knowing what it’s going to cost you. When you know your bottom line, negotiating will be easier. The most important number is not the sale’s price, it’s the number that you walk away with.
The first cost we’ll talk about is title insurance. Title insurance guarantees a clear title when you sell your property. This can cost from $1,000 to even $2,000 or $3,000, depending on the property we are selling. Knowing your title cost is very important upfront when you’re looking at numbers.
Our second cost is escrow. Escrow is your neutral partner, and they make sure that all the money comes in. They also ensure that you have a clear title, deal with the lender, deal with the realtors, and deal with pretty much everybody involved. They’re neutral for the buyer and the seller, and the cost can range between $900 to $3,000, depending on where the property is and how much the property is selling for.
Another cost you’re going to see on your statement is tax prorations. This means that, in the state of California, you are responsible for your taxes on the home up to the date that you sell it. Whatever is sold before that, that’s going to show on your statement also.
For example, if you have a tax bill of $10,000 and you close mid-year, your tax proration is going to be anything before that date that hasn’t been paid. In this particular example, that would be around $5,000.
Money Owed On Your Home
The next item you’re going to see on your closing statement is what you owe on your home. Let’s say you sell it for $500,000, but you still owe $300,000. You’re then going to show $300,000 coming out on your closing statement. It’s a good idea to know what your balance is so that at closing you have a good idea of what your final number is going to be.
If you plan to utilize a realtor to sell your home, the next cost is going to be your realtor’s commission. Typically, the commission is between %5 and 6% of the sale of your home. That kind of depends on the package that you choose when you choose a realtor.
When you’re selling your house, there’s a lot of things involved, like pictures, marketing, and staging to name a few. On top of that, there’s so much that your realtor does behind the scenes, including showings, coordinating inspections with inspectors, and working with an appraiser. Your realtor also may need to get subcontractors to fix the plumbing, lighting, and more. Whatever it is, there’s a lot that’s included in a realtor’s commission.
Total Closing Costs
I hope this gave you a good idea of the costs involved when selling your property. When all added up, this cost comes to about 6-8% of the sale of your home. If you would like to have a seller’s net sheet of the exact dollar amount you’ll pay when closing on your home, give us a call. We’re here to help, and we can get that to you as soon as possible so you know how much you’ll profit on your home sale.