Most people sell their homes to make some money, right? This is true in most cases, but did you know the average home seller spends around 10% of the selling price on expenses?
Selling a house isn’t free most of the time. Instead, there are closing costs for sellers that they must pay.
If you’re planning on selling, you should know about these expenses. Are you interested in learning more about these costs?
Continue reading this guide to learn more about the closing costs that sellers must pay.
Home Staging
So, what are closing costs, and why do sellers pay them? Closing costs are necessary expenses you incur when selling your home. Buyers also pay closing costs, but they pay different ones than sellers.
When you sell a house, the first cost you might have is for staging. Staging is a process homeowners use to improve their home’s looks and appeal.
Some homeowners might need to do minor tasks, while others might have to make significant renovations. Therefore, the amount you spend on staging depends on your home’s condition.
Most homebuyers look for houses that don’t need much work, so you might want to keep this in mind as you prepare your house for sale.
Another tip is to concentrate on the most essential tasks. For example, your home’s curb appeal is a significant factor that affects a home sale. Another area to focus on is your kitchen.
Repairs
The next cost to sell your home to know about is repairs. Home staging is something you do before listing your home, while repairs are something you do after finding a buyer.
The person who purchases your home will initiate the sale by writing a purchase offer. The buyer can ask for repairs in this offer, and you must make them if you accept the buyer’s proposal.
For example, the buyer might see that your furnace is old and needs to be replaced. The buyer can respond by asking you to pay for the furnace replacement.
Replacing a furnace can cost thousands of dollars, but you’d have to pay this if you agree to it.
The buyer might not ask you to make any repairs. However, many buyers do. Therefore, these repairs become a cost for selling your house.
Commissions
One of the most expensive seller closing costs is the real estate commissions. When you choose a real estate agent for your home sale, you agree to pay them a stated rate.
The rate might be 5% or more, based on the selling price. So, if you sell your house for $300,000, you might pay $15,000 or more in commissions.
This amount comes directly from your profit. Therefore, if you pay a commission to a real estate agent, you will receive a lower check when closing the home sale.
Did you know you can avoid this fee and other closing costs? To do this, contact a cash buyer. They’ll give you an offer for your home within 24 hours, and you won’t pay any closing costs.
Title Insurance
Another closing cost sellers pay is title insurance. Most people don’t understand what this is, yet it’s a normal requirement with home sales.
Title insurance is an insurance policy that protects the home’s title for the buyer and lender. Both parties involved in a home sale pay a portion of the title insurance.
The buyer pays the title insurance the lender requires and uses for protection. However, the seller pays the policy that protects the lender.
Title insurance is a requirement with loans. However, you don’t need it with a cash home sale. People paying cash for homes can still purchase it, though.
When a buyer has title insurance and discovers a problem with the home’s title, the title insurance policy pays the costs to fix the problem.
Escrow
When you close on a home you’re selling, you might also encounter some escrow costs, and many sellers overlook these expenses. The seller must pay the buyer several different expenses relating to their escrow account.
First, they must pay prorated property taxes. The seller pays the property taxes from January 1 to the closing date.
For example, if your property taxes cost $1,200 per year, you must pay $600 to the seller if you close halfway through the year.
The same is true for homeowner’s association fees. You might even have other prorated escrow expenses to pay when closing on your house.
Other Selling Fees
Sellers also pay a few other expenses at closing. For example, they might have to pay fees for transferring and recording the loan. These are fees that sellers can’t avoid.
Additionally, sellers typically pay loan payoff fees, appraisal fees, and inspection costs.
You can ask your real estate agent for a list of all the extra selling fees you must pay. After getting the list, you’ll see every fee you’ll be required to pay when selling your house.
Attorney Fees
Finally, it’s not uncommon for sellers to encounter some legal fees when selling their homes. They might have legal fees for the lawyer they hired to help with the sale, but they might also pay the buyer’s legal fees.
Buyers don’t have to hire lawyers for home purchases, but they sometimes do. If the buyer chooses this route, they might ask you to pay these legal fees.
Avoid These Closing Costs for Sellers
Selling a house can be a costly event, yet you can avoid these closing costs for sellers. If you’d like to avoid them, contact a cash home buyer.
We Buy Houses Nashville is a company that purchases homes for cash. If you sell us your house, you won’t have any expenses with the sale. You can learn more about selling your house for cash by contacting us.
