WHAT COSTS ARE RELATED TO THE SALE:
Home seller closing costs typically total 6% to 10% of the final sale price, which is automatically deducted from your net sale proceeds at closing rather than paid out-of-pocket beforehand.
Here are some costs in your sale that a seller may see on their closing statement. (Some of these will not pertain to every seller.)
Mortgage Pay Off: Before the closing, you will sign a release for the Title Company or Attorney to get the amount that will be owed at the day of closing. This will allow the Closing Company to prepare the closing documents and they will issue a check out of your proceeds at the closing to pay off your outstanding mortgage.
Lines of credit or Equity lines: As with the mortgage pay off, you will have to authorize the closing company to get this information. If there is any amounts owed, they also will be paid off and any lines of credit closed.
Prepayment Penalty: Often, sellers think that all that is owed is the amount showing on their last statement. This is not always true. A prepayment penalty could be in your mortgage. You may also owe interest depending on the day of the month that you close.
Unpaid Taxes/Liens: This is why title work is important prior to closing to see if there are any liens or unpaid taxes on the title. These items will also have to be paid the day of closing. The closing company cuts these checks out of your proceeds and pays them on your behalf.
Special Assessments: Special assessments are things like water, sewer, road or other local government improvements that were assessed to the property. In most cases they must be paid off, in others, they can be assumed by the buyer. If they are to be paid off, again the closing company will pay these out of your proceeds.
Real Estate Commissions: Usually the largest expense, around 5-6% of the sale price. (Commissions are always subject to negotiation).
Transfer & Stamp Taxes: Government taxes required to transfer the deed, which vary heavily by state and municipality (e.g., Florida charges a documentary stamp tax of 0.7%, or 70 cents per $100).
Title & Escrow Fees: Costs for title searches, clearing liens, escrow handling, and sometimes the owner’s title insurance policy depending on local custom.
Prorated Property Taxes & HOA Dues: Your proportional share of property taxes, neighborhood dues, and condo/HOA estoppel letter fees up to the day of closing.
Seller Concessions: Any agreed-upon repair credits, home warranties, or closing cost help given to the buyer.
Attorney or Settlement Fees: Legal representation costs should you choose to have an attorney represent your sale.
