Closing costs are all the fees and expenses that have to be paid on closing day at the closing table. Typically, closing costs run about 3% to 6% of a home’s total purchase price. Buyers and sellers both have closing fees that need to be paid. Read on to find out about 5 costs Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas home sellers should prepare for at the closing table.
1. Agent Commissions
Typically, at the closing table, Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas home sellers pay both their and the buyer’s real estate agent commissions. Real estate commissions vary, but the average rate is 5% to 6% of the purchase price. Discount brokers are out there but the adage you get what you pay form applies here. The Sellers and his or her agent decide how the seller and buyer commission is split.
The 5% to 6% commissions mean that for a $500,000 home you’d wind up paying $25,000 to $30,000 in agent commissions. That may sound like a lot, but you also have to consider what you’re getting for your money. We will do all the selling legwork for you – updating your listing, arranging viewings, scheduling and taking care of paperwork etc. In addition, we offer professional photography, virtual tours, home staging, and thoughtful print and digital marketing. This all adds up to driving more traffic and superior offers for your home. Plus the time savings is enormous to the seller.
Sometimes, though, it’s possible to negotiate the commission. To find out more about agent commissions Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas contact us at 917-608-7277.
2. Transfer Taxes
Transfer taxes are applicable when the title to a property is transferred from one party to another. In New Jersey it is a sliding scale but you can expect to pay around 1%. See Chart below.
The amount of transfer taxes depends on the purchase price of the home. If you’re unsure about transfer taxes in Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas, talk to us at 917-608-7277. You can also request our seller’s guide that will help you understand Transfer tax and the entire selling process.
3. Buyer’s Home Warranty
Homeowners insurance, as you know, typically covers the structural aspects of your home for damage by such things as fire or natural disasters. A home warranty, however, has a different purpose, and it is another of the costs Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas home sellers should prepare for at the closing table.
The home warranty can and often does cover the cost for repair and/or replacement of appliances and systems such as electrical, plumbing, and HVAC. Some sellers opt to purchase such a home warranty before getting to the closing table so that the buyer will be assured she isn’t facing any repair costs on signing the dotted line. Many other buyers offer to pay for a one- or two-year warranty upon closing. While not necessarily a requirement, the home warranty is common and runs around $600. Coldwell Banker had a relationship with American Home Shield and I can offer discounted rates. Contact us to learn more.
4. Mortgage Payoff
If you still have a mortgage on your home, you’ll also be facing a mortgage payoff at the closing table. In most cases, sellers use the proceeds of the sale to pay off the remaining mortgage. A current mortgage statement will give you a solid estimate of what the balance is on your mortgage. The difference less closing costs is your expected proceeds.
5. Prorated Property Taxes and Title Insurance
You should also be prepared for two more expenses at the closing table: prorated property taxes and title insurance.
PRORATED PROPERTY TAXES
“When you sell your home, you must pay property taxes that accumulate up to the date of the sale. The closing agent will check your local county clerk’s office to see what you owe before closing. Sellers who are escrowing taxes often get some money back at the closing table. Buyers can expect to prepay 1 quarter of taxes at the closing table.
TITLE INSURANCE
The title insurance is usually paid by the seller. Unlike other kinds of insurance, it “doesn’t involve a monthly premium,” just a one-off payment. After you make the single payment during closing, title protection exists for the term of homeownership. “In most states, title insurance costs 0.5% – 1% of the total value of your home loan.”
The Agent Advantage
These are the major and most common expenses sellers will have to pay at closing, but there can be and often are others. A lot of it depends on location and the stipulations in the sales contract. That’s why it’s so critical to have an experienced Westfield, Cranford, Clark, Scotch Plains, Fanwood and Mountainside Areas agent in your corner – so that you don’t come up against any costly closing-table surprises. So to be fully prepared for everything you may face at the closing table, contact us today at 917-608-7277.