Have you decided to sell your house but aren’t sure how much it’s going to cost you? It can be confusing to figure out closing costs and fees and know exactly how much money you should have in your pocket at the end of the day. Let me show you exactly how much it costs to sell your home in today’s market. By breaking down the numbers, you can negotiate with the upper hand and know how much you should walk away with at the end of your transaction.
Title And Escrow Fees
Selling your house and moving is stressful. You have to think about finding a new house, packing, cleaning, and helping your family adjust to all the changes. What’s even more stressful is not knowing what it is going to cost!
Understanding what your bottom-line net walk-away figure will be is key. Remember, the most important number is not what your house sells for but what you take away at the end. The very first costs you’ll see on your closing statement are the title fees.
Title fees vary on the sales price and the title company. Most title companies charge in the $800 to $1,000 range for $100,000 sale price up to $1,800 to $2,200 at the $500,000 price point. The title company’s job is to transfer the title to the new buyer and insure it. It’s a standard cost of doing business, and the title company’s job is to verify that the title to the real estate is legitimately given to the home buyer. Essentially, they make sure that a seller has the rights to sell the property to a buyer, which is very important when buying a home.
Another line you’ll see on your closing statement is for escrow fees. Escrow is a neutral third party that acts on behalf of the buyer and seller. They hold on to all the monies and transfers of money within the transaction. In our area, the title company and the escrow company are typically the same. You will close with the escrow company, but your title is insured by a title company.
Taxes And Commissions
Another cost you’re going to see is a fee for local transfer stamps or taxes. As with anything that’s bought or sold, there’s a tax to it. It’s no different in real estate. Let’s use Northern Illinois as an example. When you sell a house in Northern Illinois, that cost is roughly $1.50 per $1,000. Here’s how that’s broken down. There’s a state tax that runs roughly $1 per $1,000 and a county tax that costs roughly $0.50 per $1,000. When you close on your property, you will be responsible for your share of the unpaid real estate taxes from the time you occupied it to the time that you close on it. This is called a real estate tax proration. The amount of this tax will be determined by the closing date, but it’s just for the taxes you already owe. This cost is dependent on the state and county of the property, so make sure to research those taxes and verify them with your real estate professional.
If you are using a realtor to sell your home, or the buyer is using an agent, another cost to you is commissions. The commission is usually around 6% of the sales price, 3% for the buyer’s agent and 3% for the seller’s agent. However, all the costs of marketing your home are typically included within the commission as well if you are using a seller’s agent.
Total Closing Costs
When it’s all added up, your closing costs typically reflect 7% to 9% of your sales price but of course, this total price will vary. I highly advise that you get a seller’s net sheet before you list your home so that you have a realistic expectation of what you will be putting into the bank from the sale of your house.
Owner Advocate
There are many details I haven’t covered, but I am always happy to connect and answer any further questions you may have. Look local. Find an Owner Advocate in your area to help sell your property. They are certified in 5 ways to sell your home. You can get an offer in as soon as two days.