Blog

What Costs Can I Expect as a Home Seller?

What Costs Can I Expect as a Home Seller?

January 15th, 2020 | Mortgage Advice

When you bought your house, the fees you paid included the closing costs for your mortgage, your down payment, and maybe some mortgage points. Now that you are ready to sell, there are a few more costs that you need to anticipate. In fact, according to Realtor.com, sellers often pay between 6% -10% of the sale price in fees and commissions.

Real Estate Agent Commission Fees

It is customary for home sellers to pay both the seller’s and the buyer’s real estate agent commission fees out of the proceeds of the sale. The standard rate is 3% for each, totally 6% of the sales price for agent fees. Say your home sells for $250,000. You would pay $15,000 in real estate agent at the end of the sale. It is sometimes possible to negotiate your agent’s fees and there are some companies that routinely charge less than 3%, but a 6% commission is what most sellers can expect to pay. And don’t think you can outsmart the system by having your agent act as the buyer and seller agent; you would just end up paying the full 6% to that agent, instead of splitting it between two agents.

Home Repairs

In order to attract buyers, you may need to make some home repairs and updates before listing. However, even after you have a buyer under contract, if the home inspection turns up any problems, the buyer may request that repairs be made before the mortgage closing date. Common problems include plumbing leaks, damaged roofs, or issues with the HVAC system. In some cases, instead of completing the repairs, you can credit the borrowers some cash at closing so they can pay for the repairs once they own the property. This, of course, will cut into your profits from the sale.

Property Tax

If the yearly property taxes are not yet due at the time of sale, sellers are often required to pay a pro-rated amount of the taxes based on how long they lived in the home that year. The good news if you have already paid your property taxes is that you may receive a refund for the months you will no longer be the owner.

Closing Costs

While buyers are usually responsible for many of the mortgage closing costs, sellers may be asked to pay some of them, especially in a buyer’s market. These could include things like title insurance, recording fees, transfer taxes or homeowners association fees. Most of these costs can be negotiated in a seller’s market.

Capital Gains

Sellers need to remember that when they make a profit on a home sale, they may face a capital gains tax. You can exclude up to $250,000 of profit as a single person or $500,000 as a married couple on your taxes if you have lived in that home for two of the past five years and you haven’t used the same tax break in the past two years.

Before you start the selling process, give us and your real estate agent a call to discuss all the possible fees and closing costs you will encounter. This will help prevent nasty sticker shock during the selling process and help you better estimate your final sale proceeds.

Comments



Leave a Comment

Contact Us


Not readable? Change text.


docs

Required Documents

VA Loans

Veteran Loans

Disclaimer:
Prime 1 Bancorp, Ltd is not affiliated with any government organization or bank nor do we act on behalf of the FHA or VA. This material is not from HUD or FHA and has not been approved by HUD or a government agency. We are not a Federally chartered or State Chartered Bank. We are an we are an Illinois Residential Mortgage Licensee by the Office of Banks and Real Estate Lic #MB.6761138, a California CFL Licensed Mortgage Brokerage by Department of Business Oversights Lic #60DB055973, a Colorado Registered Mortgage Brokerage by Division of Real Estate, a Florida Residential Mortgage Brokerage Licensed by the Office of Financial Regulation Lic #MBR1930 dba Prime 1 Mortgage Inc, a Kentucky Mortgage Loan Broker Licensed by the Office of Financial Institutions Lic #MB729362, a Tennessee Licensed Mortgage Broker by the Department of Financial Institutions Lic #218020, a Texas SML Licensed Mortgage Brokerage by the Texas Department of Savings and Mortgage Lending, and a Wisconsin Licensed Mortgage broker by the Department of Financial Institutions Lic #1434638BR Prime 1 Bancorp, LTD Corporate Office is located at 2720 S. River Rd Suite 50, Des Plaines, IL 60018 our Toll Free Number is 888-205-3737. NMLS: 1434638

Loan product availability is subject to qualification of the borrower and loan approval after full review of the file. Not every applicant qualifies or is eligible for every loan program. Some loan products may not be available in all states. Loan approval, note rate and annual percentage rate are dependent on factors including, but not limited to, credit, collateral, income, assets and overall financial history. Not all applicants will be approved for a loan. All loan programs, terms and annual interest rates are subject to change without notice. NMLS: 1434638

Figure: 7 TAC §80.200(b)

"CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.