When you’re selling your home, your main focus is usually making sure you walk away with as much money as possible. Like the saying goes though, you often need to spend money to make money. Along with doing what it takes to get your property in good shape for the market, a big chunk of the money you’ll spend when you sell your home will go toward closing costs.
Buyers and sellers are both responsible for their own set of closing costs during a home sale. Let’s take a look at what expenses you need to plan for when closing on a house you’re selling.
The seller in a home sale is responsible for the commission of their own real estate agent as well as the buyer’s agent. This usually accounts for the biggest expense, at about 6% of the total purchase price. But don’t forget that your agent’s commission is negotiable.
Until a sale is finalized, the buyer’s deposit is held in a third-party escrow account to protect both parties in case the deal falls through. The company that holds your money will charge a fee for their role. It can either be a flat fee (typically anywhere from $500-2,000, depending on your location) or about 1% of the sale value. Escrow fees are split between you and the buyer.
State and/or local governments charge a tax to transfer a property title from one person to another. This cost varies by state and is typically the responsibility of the seller, although some parties may decide to split it. In Washington D.C., the transfer tax rate is 1.1% for sales valued at $399,999 or less and 1.45% for sales valued at $400,000+.
Title insurance protects the homeowner and their lender in case of any future problems that are discovered with your property title, such as a claim or lien. Buyers and lenders usually each have their own title insurance policies. The buyer is responsible for paying for the lender’s insurance, while you will pay for the buyer’s.
Other Closing Costs
Depending on the specifics of your sale, you may have other closing costs to cover when you sell your house too, such as:
- Real estate attorney fees
- Recording fees
- Prorated property taxes & HOA fees
- Outstanding liens
- Buyer credits
If you sell your home for top dollar, your closing costs will feel like nothing more than a drop in the bucket. The stylish designer home staging packages from DIY Stage2Go will bring out the best in your property, so you can be sure to close with the highest-value offer.
Contact us today for more information about our effective and affordable home staging solutions!