Know Your Seller Closing Costs in Real Estate

When you list property to sell you need to know your seller closing costs in real estate. As a RI coastal real estate agent, upon listing vacant land, a multi-family home, condominium or single family home, it is what I share with clients at the listing appointment. It is interesting how home sellers forget that they have costs in a home sale. Yes Virginia, there are seller closing costs associated for the seller too.

What a Good Real Estate Agent Does Upon Obtaining a Listing Contract

Any good real estate agent knows that they need to determine whether or not a seller of real estate will have monies coming back to them at the closing of their home or else they will need to bring monies to the closing table! This is very important to know right up front when a market analysis is done on your property by an agent. If the real estate agent who is to sell your home does not present you with what is called a ‘Net’ sheet of costs, ask for it. In fact, hire a reputable real estate agent who presents you with the ‘net sheet’ facts right away. It will tell you what the resulting monies are you will receive at closing from the sale of your home. Or if there are any.

Will Your Home Sale Be a Short Sale?

If the market analysis on your home indicates that you will sell your home within 5-8% of your outstanding mortgage amounts (first lien, second lien, equity line of credit, etc.), then you can anticipate bringing monies to the closing table in order to get the liens released. In fact, you may need to consider a short sale of your property if you are that tight on monies with the property sale. Ensuring all your mortgage costs, outstanding assessments of the property, IRS liens, etc. are shared with your sales agent will allow a truly accurate compilation of costs for closing. You will know then whether you want to proceed with a short sale or just remain in your house for several more years.

What are the Specific Closing Costs a Seller Should Be Prepared to Pay at Closing?

A real estate agent calculates the specific costs (or range dependent on the sale price of the property) for the home seller and these closing cost items are as follows:

– Real Estate Broker’s Commission for the home sale (5%-6% usually) comes out of the sellers funds at closing.

– Payoff of all mortgages, liens, lines or credit and assessments for the seller. It is very important to provide a current mortgage statement to your real estate agent at pre-listing time and discuss any mortgage late payments that have occurred.

– Water bill, sewer charges and smoke/carbon monoxide fees

– Seller’s Closing attorney’s fee

– Homeowner fees (association fees)

– State tax stamps ($4.50 per thousand of the property’s sale price)

– Town/city taxes (usually up to 6 months since real estate taxes are paid in arrears)

– Title charges: wire fee, discharge tracking fee and disbursement fee

These seller closing fees above are all subtracted from the potential sales price of the real estate to arrive at the ‘NET’ figure (profit) that will be returned to the seller at closing. Usually a real estate agent will give the home seller a range of ‘net’ back to them. Again it is an estimate of costs and funds to receive. As soon as you have an offer from a buyer that you are accepting, your agent and you should evaluate the sales price based upon an updated net sheet. Knowing your closing costs in real estate as a seller is of paramount importance to you, the seller.

As a RI real estate agent, this is part of my job everyday for my sellers when I sell homes.

Whether you are buying or selling in the RI coastal real estate market, I would love the opportunity to earn your trust and business. As always, call me, Ginny Lacey Gorman, at (401) 529-7849 so we can discuss your RI real estate options. You will know your true closing costs when I sell your home.