Selling Your Home:
A Guide to Closing Costs

Understanding Closing
Costs When Selling Your Home

Closing costs are the fees you’ll incur when finalizing the sale of your home. These fees cover various expenses associated with transferring ownership from you to the buyer. Understanding closing costs upfront is crucial for a smooth and financially secure selling experience.

What Are Closing Costs?

Closing costs encompass various fees paid by both the buyer and seller to finalize a real estate transaction. These costs cover expenses like loan origination fees, title insurance, and escrow fees. As a seller, you’ll be responsible for a specific set of closing costs, which we’ll explore in detail below.

Common Closing Costs for Sellers

Real Estate Commission: The Biggest Closing Cost for Sellers

This is typically the largest closing cost, ranging from 5-6% of the selling price. The commission is split between the buyer’s and seller’s agents who facilitate the transaction.

Transfer Taxes: Understanding What You Owe

These are taxes imposed by the government on the transfer of property. Rates can vary depending on your location and the sale price of your home. Research your local government’s website or consult with a TLA Realty agent to determine the exact amount you’ll owe.

Title Insurance: Seller vs. Buyer Coverage

While buyers typically pay for their own title insurance, sellers may need to cover a policy ensuring a clear title. This policy protects the buyer from any unforeseen ownership claims against the property.

Escrow officer handling transaction closure

Escrow Fees: Streamlining Your Closing

The escrow company charges fees for handling the closing process. This includes holding funds securely, disbursing them according to the sales agreement, and ensuring all necessary paperwork is completed.

Prorated Property Taxes: Your Share of the Bill

You’ll be responsible for paying property taxes for the portion of the year you owned the home. The closing process will involve calculating and settling any outstanding property taxes.

Attorney Fees: Legal Requirements for Sellers

In some states, sellers are required to have an attorney present at closing. Even if not mandated, consulting with a real estate attorney can provide valuable guidance and ensure your interests are protected.

Home Warranty: An Optional Incentive for Buyers

Some sellers offer a home warranty as an incentive to attract buyers. This warranty typically covers major appliances and systems in the home for the first year of ownership, providing peace of mind to the buyer.

Estimating Closing
Costs for Selling Your Home

Closing costs for sellers typically range from 1-3% of the selling price, excluding the real estate commission. Here’s a simplified way to estimate your closing costs:

Real Estate Commission: Multiply the selling price by the commission rate.
Transfer Taxes: Research your local rates or consult with a TLA Realty agent.
Title Insurance: Typically between $1,000 and $2,000.
Escrow Fees: Generally range from $500 to $2,000.
Prorated Property Taxes: Divide your annual property tax by 12, then multiply by the number of months you’ve owned the property this year.
Attorney Fees: Typically between $500 and $1,500 (consult with an attorney for a specific quote).
Home Warranty (optional): Around $300 to $600.

Tips for Managing Closing Costs When Selling Your Home

Negotiate Fees: Some fees, like the commission rate, may be negotiable. Discuss your options with your TLA Realty agent to ensure you’re getting the best deal.

Negotiate Fees: Some fees, like the commission rate, may be negotiable. Discuss your options with your TLA Realty agent to ensure you’re getting the best deal.
Understanding Local Closing Cost Laws: Research or consult with a TLA Realty agent to understand any local requirements that might affect your closing costs.
Offering to Split Closing Costs: Consider splitting certain closing costs with the buyer to make your property more attractive.
Preparing for Unexpected Closing Costs: Set aside extra funds to cover any unforeseen expenses that may arise during closing.
Work with a TLA Realty Agent: Your Expert Guide to Closing Costs
- Our experienced agents at TLA Realty can help you understand and potentially reduce your closing costs. They can provide expert advice tailored to your specific situation to ensure a smooth and efficient transaction.

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Selling Your Home: A Guide to Closing Costs

Understanding Closing Costs When Selling Your Home