Selling a home involves various expenses, including closing costs. As a seller, understanding home closing costs is crucial for accurately estimating your net proceeds from the sale. This comprehensive guide aims to demystify the different types of closing costs you may encounter. Here's a breakdown of key points:

• Real Estate Commission: The most significant closing cost for sellers is the real estate commission. Typically around 5-6% of the final sale price, this fee is paid to the listing agent and the buyer's agent. Estimated range: $15,000 - $18,000.
• Transfer Taxes: Depending on your location, some state or local governments impose transfer taxes, calculated based on the property's sale price. It's essential to check with local authorities or consult a real estate attorney for specific transfer tax rates in your area. Estimated range: 0.5% - 2% of the sale price.
• Attorney or Escrow Fees: In certain states, hiring an attorney or an escrow company is required to handle the closing process. These professionals ensure proper management of legal and financial aspects. Generally, the seller covers attorney or escrow fees. Estimated range: $500 - $2,500 or more.
• Title Insurance: Sellers often purchase a title insurance policy for the buyer, protecting them from potential title issues or disputes. The cost varies based on property value and location. Estimated range: 0.5% - 1% of the property's sale price.
• Outstanding Liens or Judgments: Any outstanding liens or judgments against the property must be paid off during closing. These can include unpaid mortgages, property tax liens, or outstanding bills from contractors. Costs vary based on the amount owed.
• Home Warranty: Sellers may choose to provide a home warranty to buyers, covering repairs or replacements for specific home systems and appliances. The cost of the home warranty is typically borne by the seller. Estimated range: $300 - $600 for a one-year coverage plan.
• Prorated Property Taxes: Property taxes are prorated between the buyer and seller based on the closing date. Sellers pay taxes until the closing date, after which the responsibility transfers to the buyer. Exact calculations depend on local tax laws and the closing date.
• Homeowners Association (HOA) Fees: If your property is part of an HOA, any outstanding fees or assessments may need to be paid at closing, ensuring the property is free of financial obligations related to the association. Costs vary based on the specific HOA.
• Repairs or Inspection Costs: Buyers may request repairs or additional inspections as part of the sale agreement. The cost of these repairs or inspections may be negotiated between the parties, potentially falling on the seller. Costs depend on the nature and extent of the requested work.</div></li>
• Miscellaneous Fees: Additional closing costs can include courier fees, wire transfer fees, or notary fees. While relatively small, these costs can accumulate. Costs vary, but generally range from $50 to $200 each.

Remember, the specific closing costs you encounter may vary based on your location and sale agreement terms. Working closely with a real estate agent, attorney, or escrow officer will help you understand and prepare for the closing costs associated with your transaction.

As a reminder, MUSTWANTS is specifically designed to assist you in strengthening your ability to clearly collaborate and communicate with your Real Estate Professional.