“Hi Gary, besides the Realtor fee, what is the cost to sell a home?”
There are several categories of items that you should be aware of:
- Standard Seller Closing Costs
These include your portion of the title and escrow fees, the county transfer tax, and other fees. These tend to total .5% to 1% of the purchase price, depending on your sale price. For round numbers, you may want to use 1%.
- Costs of OWNING
a) Prorated Interest – Your loan payment is paid “in arrears” (your August 1 payment pays for July), so you’ll pay some accrued interest on your loan(s) at closing.
b) Prorated Property Taxes – You may have a credit or debit of several months of property taxes, depending on when you close.
- REPAIR Costs
a) Misc Repairs – Your buyer will have one or more inspections and ask for repairs 95% of the time. It’s part of the process and you should expect that you’ll have to pay for some. Common expensive fixes are foundation, sewer, or roof problems.
b) Pest Control (Termite) – Not legally required, but 99% of buyers expect a full clearance. Get a report early and avoid surprises.
- TAX Costs & Withholding (check with me & your tax pro)
a) Income Tax – Lived in and owned the house for at least 2 of the past 5 years? You’re most likely exempt. Or perhaps it’s a rental property — if you do a 1031 exchange, you can defer some or all of your taxes.
b) FIRPTA & Cal-FIRPTA – U.S. and CA taxpayers are exempt. Otherwise, the feds or state may withhold funds from your sale.
a) Prepayment penalty – Rare, but check your loan papers or call your lender to be sure.
b) Liens & Judgments – Forgotten or erroneous items can crop up and must be paid or dealt with.
c) Closing Delays – This could cost you added interest, taxes, insurance, & maintenance.