How Much are Sellers Closing Costs

How Much are Sellers Closing Costs

If you have thought of selling your home, you likely have thought about how much money you will receive after the sale.  As you are probably aware there are several costs involved in the sale of a home.  In order to find out how much you will net, you need to know how much are sellers closing costs.

It is always better to go into the prospect of selling your home with as much knowledge as possible.

One of the tools that Realtors® use to help give homeowners an idea of what their net proceeds will be is the Sellers estimated Net Sheet.

While there may be additional costs involved in the sale of your home, this sheet will give you a good idea of what your net will be after the sale of your home.

Below I will go through some of the numbers used in calculating what you may net on the sale of your home.  Are you considering moving up to a larger home?

Home Sales Price

This will hopefully be the biggest number on the sheet and is the price you negotiate with the buyer during the negotiations.  The home sales price will be estimated based on the list price and the current market conditions.  It can be more, less or the same as the list price.  You might also enjoy reading about how much your home’s worth.

 

Appraisal

You may or may not choose to have your home appraised, but if the buyer gets a mortgage the bank definitely will want an appraisal.  Keep this in mind as it may impact the price your home sells for.  Read about Home Valuations, CMA’s and Appraisals here.

 

Settlement Date

This is the date that you, the buyer and the attorney will meet to finalize the sale of your home to the buyer.  This date is important because of the property and school taxes that you will pay or receive back.  You can find out what your yearly tax bill is here on the New Castle County website.   You can enter your tax parcel number or just enter your home address.  Please make sure you don’t enter Dr, Rd, or anything else ONLY the street name.

Mortgage Payoffs

If you have a balance on your mortgage(s) or a home equity loan, those liens must be paid off at settlement.  You can usually get an estimate by calling your mortgage provider.   Some mortgage providers even provide payoff estimates online now.   If your mortgage payoff is larger than the proceeds of the sale, you may need to do a short sale.

Realtor® Commissions

The seller is usually responsible for commissions.   The commission is based on the agreed amount in the listing agreement.  It will spell out what the commission compensation for the listing broker.  It will also list what will be provided to the buyer’s broker.  The agents for both the seller and the buyer are paid based on their agreements with their respective brokers.  You can read here How to get Your Home on the MLS.

Seller Assistance/Concessions

During negotiations sometimes the buyer and seller will agree that the seller will provide assistance to the buyer.  This can be negotiated during the initial agreement or by an addendum to the sale later.  Seller assistance can be either a set dollar amount or a percent of the sales price.  There are limits to how much a buyer can receive in assistance.  These limits are usually based on the type of loan the buyer is receiving.

Property Taxes

Property taxes are pre-paid by the seller every year.  At settlement, the taxes will be prorated based on the settlement date.

Transfer Taxes

The Transfer tax in Delaware is 3 percent.  Usually, this amount is split between the buyer and the seller evenly.  There are some situations where that will not be the case.  Your Realtor® will let you know if that is the case for you.  Thinking of selling read Listing Your Delaware Home-Getting Ready.

Home Warranty

During negotiations, the seller and buyer may agree to the purchase of  a home warranty.  If they agree that the seller will pay for the warranty, that will be deducted from the proceeds of the sale.  Usually, a home warranty in Delaware will cost approximately $350-$500 based on what type of warranty you purchase.

Certificate of Resale

A Certificate of Resale is required for Condominiums.  The condo association will provide this at the owners request for a set fee.  Usually, this is paid before settlement however it can be purchased and paid for at settlement.

Attorney Fees

Depending on who the attorney is and what they have to do for the seller, there are some fees paid by the seller.  These usually amount to no more than approximately $200, but can be a lot lower.

Other Fees

There are occasionally other fees that may come into play, but these are rare and shouldn’t impact your net too much

How Much can I expect to Net?

After all of those deductions hopefully, you will net what you expected based on your net sheet.

Occasionally, the seller will have a negative amount as the proceeds and will lose money on the sale of their home.

Consequently, the seller may need to bring funds to the table.

In these cases where the seller cannot bring funds to the table, a short sale may be considered.

Currently, house values have been increasing which is excellent for sellers.  This uptick in home values will help most homeowners by increasing the chance that they will receive an acceptable profit from the sale of their home.

According to Sean Casey Delaware Real Estate agent with Patterson-Schwartz Real Estate.  The average New Castle County home has increased to $270,000 for single-family homes as of the date of this post.

Obviously, a sellers net sheet is great tool that can help you estimate how much money you will pocket from the sale of your home.  Most of all, the sellers net sheet will help you plan ahead for the costs incurred in the sale of your home.

Typically, the seller net sheet will be provided to you by your agent.  He or she will prepare one for you prior to listing your home for sale and will update it when you have received an offer.  Hopefully, your seller net sheet will be as accurate as possible in estimating what the final amount you will make from the sale of your home.

Disclaimer:  The information provided in this article is not intended to be substituted for legal or accounting advice.  No one can guarantee your home will sell for a specific price.  This information and the sheet are provided as a guide.