Do Seller's Have Closing Costs?

Do Seller's Have Costs Associated with Selling?

by +Sarah Marrinan - Keller Williams Premier Realty 

YES.

OK, so what are they? Here is a list of home sale related expenses that sellers may incur but don't let this list intimidate you.  Not all items apply to all sellers. You really need to consult an agent to decide what expenses are applicable to you.

Potential Seller Expenses at Closing

Pay-off Present Mortgage

Interest Adjustment

Pay-off 2nd Mortgage

Pay-off Home Equity Line

Mortgage Courier Fee

Seller Paid Buyer Closing Costs

VA Funding Fee

VA Closing Fee

FHA Service Fee

1 Month Association Dues (if HOA)

Association Letter Prep. Fee (if HOA)

Special Assessment Search

Special Assessment Levied or Approved

Future Pending Special Assessments

Brokerage Fee

MLS Buyer Broker Portion

Partners Title Closing Service Fee

Broker Retainer Fee

State Deed Tax

Other Title Charges

Estimated Recording and Transfer Fees

Balance of Real Estate Taxes Due

Homeowner's Warranty

Well Disclosure Filling Fee

MN Conservation Fee

Septic Compliance

Water Test

Some services that may or may not be included in your brokerage fee: Home inspection, Home Repairs/Handyman, Staging, Cleaning, Landscaping, Professional Photos, and Movers.

And we can't forget, some people will have capital gains tax... http://www.irs.gov/taxtopics/tc701.html

Need a list of expenses specific to you?  Call me for a free consultation. (Hint, my contact info is in the side column of this blog.)

See Also:

How To Save Money For Buying a Home | Tips for Selling Your Twin Cities Home | Four Horrible Real Estate Mistakes To Avoid | Housing Market Updates

Three Must-Dos for Selling a House

Three Key Tips for Selling Your Home

Knowing the value of your house and exercising patience and restraint are key. A good real estate agent can help you determine the market value of your home but you may want to go a step further and get your home appraised as well; it’s worth the $250 to $500 price tag. In a good market, the sale price may be above the appraisal with the right buyer. In a weaker market, the sale price may be around or below the appraisal figure. Either way, you can use it to defend your equity.

Remember, patience is key. Yes, it's true there is concern that homes can go “stale” after being on the market for too long, meaning they are no longer attracting interest from buyers. But a stale sale usually results from a seller overvaluing his or her home. The opposite can also occur: in a rush to sell a home, or to sell in time so as to move into a new house, a home can be undervalued.  This is another reason the appraisal and your real estate agent are important.

A home inspection is also important in avoiding complications during your sale. The buyer will get an inspection, but discovering problems during a pre-sale home inspection allows you to have more control over how to handle them. If your home inspection does uncover problems with your home, it’s essential that you familiarize yourself with your state’s disclosure laws to avoid future litigation. Generally, they require you to disclose the presence of any hazardous materials in your home or significant flaws in construction. If you’re unsure of what you have to disclose, consult a real estate agent, attorney or your local housing authority.

Finally, try to put your home on the market before buying a new one unless you are qualified and can afford paying two mortgages or your first home is own free and clear. If you do end up finding a house that you can’t wait to buy before selling your own, you can ask your lender for a bridge loan. A bridge loan is a special type of loan that, if you have enough equity in your current home, allows you to pay the down payment on a new home. You may also be able to get a home equity loan in order to help with the dual mortgage payments. Please consult a lender (or attorney) for further information.

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The Home Selling Process

A guide to the home selling process.

By +Sarah Marrinan

1) Choose a Listing Agent

• A listing agent will represent you and have a fiduciary responsibility to look out for your best interests.
• Interview agents and review their experience and marketing plan.
• Negotiate and sign your listing agreement, including term.

2) Get Home Ready for Sale

• Prepare your home for sale by cleaning, decluttering and improving curb appeal.
• Hire a professional stager to stage your home, or ask your real estate agent for help in staging.
• Make repairs before selling. Get a home inspection if you are not sure what the most important repairs will be.
• Hire a handyman for repairs you can't make on your own.
• Protect your privacy while your home is on the market.  Keep all your personal documents locked away. Remove personal photos. Lock up your valuables.
• If you're selling a home where pets live, make alternate plans for your pets.

3) Figure Out How Much Your Home is Worth

• A seller's biggest mistake is to overprice.
• Price your home in line with sold homes identified in a comparative market analysis report.
• Consider your market competition. 
• Consider whether your market is hot, cold or neutral, and price according to the market temperature.

4) Obtain Seller-Required Inspections

• If your contract calls for a Truth-in-Housing inspection, your agent will help arrange it. 

5) Seller Disclosures

• All homes in the US are subject to lead-based paint and Radon disclosures.
• If you are aware of material facts, disclose them. Hiding material defects could result in a lawsuit down the road.
• If you are in an association you will be required to provide copies of the association documents to the buyer.

6) Market Your Home

• You or your agent should identify the selling points and choose advertising words to sell.
• Approve your agent's marketing campaign and advertise your house for sale yourself amongst family and friends.
• Follow the top 10 home marketing tips for selling your home.
• Hire a virtual tour company to take quality photographs and put a 360-degree virtual tour online.
• Tweak marketing to increase traffic and showings while the home is on the market.
• Your agent should saturate the internet with photographs and description of your home.

7) Receive Purchase Offers and Negotiate

• Make certain that buyers use the right form for writing a purchase offer.
• Even if you receive a lowball offer, negotiate by issuing a counter offer. Don't ignore offers.
• Ask for first right of refusal if the buyer's offer is contingent on selling a home.
• Consider making a counter offer contingent on buying a home, if market conditions warrant.
• Don't be afraid to make a full-price counter offer based on your agents suggestion, if you are priced competitively.
• If you are priced right, you may receive multiple offers depending on the level of competition and local market activity.

8) Show Your Home

• Most agents use a lockbox.
• Your home may show better if you are selling in spring-fall than selling in winter.
• Selling during the holidays will likely result in a lower sales price, regardless of what agents tell you.
• Follow the top 10 home showing tips. You've got only one chance -- and sometimes only 3 seconds -- to make a good first impression.
• Prepare for an open house and use the approach sparingly.
• Ask for buyer feedback so you can adjust your price, condition or marketing campaigns accordingly.

9) Cooperate with Home Inspection

• Get ready for the home inspector.
• Ask your agent to provide you with a home inspection checklist so you will know which items an inspector will want to see.
• Expect that the inspector will want access for an attic inspection and will look for a wet basement; prepare those areas for inspection.

10) Negotiate Request for Repair

• Ordinarily, sellers do not need to accept a buyer's request for repair; however, buyers can generally then cancel.
• You are entitled to a copy of the home inspection report, if the buyers request repairs.
• If you do not choose to make repairs, a buyer might instead accept a closing cost credit.

11) Open Escrow / Order Title

• Your agent or transaction coordinator will open escrow and order a title policy.
• Write down the contact information for the closing agent.
• Select a date to close based on when the buyer's loan will fund.
• Ask for a receipt for the buyer's earnest money deposit.

12) Appraiser Appointment

• Clean the house the day before the appraiser arrives.
• If you receive a low appraisal, ask your agent about alternatives.
• You are not entitled to receive a copy of the appraisal because you did not pay for it.
• If the buyer decides to cancel the contract based on an appraisal, ask your agent or lawyer about your rights.
• This is separate from the home inspection but looks at many of the same items to determine a condition level

13) Ask Buyer to Release Contingencies

• If you do not demand a release, buyers are not obligated to provide it.

14) Move Out

• Once all contingencies have been removed and all parties have receive a final closing notice move out.
• Unless otherwise agreed, the house should be completely empty before final walk-through

15) Final Walk-thru

• The buyer is entitled to a final walk-through just before closing to make sure the home is in the same condition and when they agreed to purchase it and all negotiated repairs/updates have been done.

16) Closing

• Bring a valid picture ID.
• Bring keys and garage door openers.
• Be on time.

17) Post Closing

• File for homestead if the property will be your primary residence
• Your property deed, reconveyance and deed of trust will record in the public records.
• Title will notify you when it records.
• Depending on buyer's possession rights specified in the contract, you may be required to move on the day it closes.

Is now a good time to buy a house?

Though no economists agree completely, the general consensus is ABSOLUTELY buy a house now if you can afford one.

 This week in an article from CNN Money:
"Barclays Capital put out a report recently forecasting that home prices, which fell by more than a third after the housing bubble burst in 2007, could be back to peak levels as soon as 2015.
"In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts," said Stephen Kim, an analyst with Barclays, in a note to clients.
In addition to what Kim sees as a big rebound in building, he's bullish on home prices, expecting rises of 5% to 7.5% a year."

Now, 7.5% for 3 years won't get the market value all the way back up to what we paid for our house in 2005 by the year 2015 but it would be close.

So if you are a first time home buyer, grab onto to a record low interest rate and rush to your favorite agent!

If you need to sell your house to buy another one and you would like to wait for a bit of recovery, just remember, it won't just be your house increasing.  You can afford much more house now than you will be able to in 3 years and these interest rates can't last forever!

Sarah Marrinan
Realtor®
The Goerss Home Team - Keller Williams Premier Realty
www.CallSarahFirst.com
Direct: 651-964-0289