Sell My Home
It’s easy to forget about closing costs. For first time home buyers (AND SELLERS) these unexpected costs can be as startling and confusing as a blizzard in Florida, completely baffled and unprepared. We’ll often save for our down payments and forget about closing and some of us are just simply unaware.
Selling Costs Vs. Closing Costs?
We can’t fully answer this question until we first accurately define the terms we’re talking about here. That sounds philosophical, but what we mean is that two people will often use one term to something completely different. For now, let’s first just define the strictest definition of the term, “Closing Costs.”
How long does closing take?
Closing Costs are the portion on a HUD or Closing Statement that tally up the administrative costs associated with title search, title insurance, recording that transfer of title, costs of drafting those closing documents, and the localized tax for transferring that title (sometimes referred to as tax stamps).
How much does Closing Cost?
So how much does that narrowly definition of ‘Closing Costs’ actually cost? Well, really, NOT that much, but as with everything else, that depends on where you’re from. Indiana has the lowest average closing costs at $1909. The North Carolina closing cost average falls at $2809.91 while South Carolina’s closing costs can range from $3000 to $4000. Other than maybe places like Washington DC, closing costs in their true definition really don’t cost that much, nor would they actually impact the financial integrity of a deal with these numbers.
So as we’ve discussed, the Buyer typically pays closing costs: attorney fees, title insurance, and more.
How do I Sell my House : CASH
How much are SELLING Costs?
The broader question with the larger implication here is about: “what are the actual SELLING Costs of a transaction?” Now we’re talking. Forget about “Closing Costs,” how much does it actually cost to sell my house?
Selling Costs include all these little ticky-tack Closing Costs but also encompass the larger ticket items. Let’s start with the biggest one: realtor fees! The rule of thumb here is 3% for the selling agent and 3% for the buyer agent. So on a $500k house, realtor fees ALONE are $30k.
So what other Selling costs here? Well go check out a full page we we dedicated to selling costs, but as a little shorthand list here, here’s the bare minimum without touching things like landscaping or property repairs:
- Deep clean
- Staging the Home, which alone can increase the value of your home by 5%
- Holding Costs.. unless you sell the home the same day you move into a new one or you crash with your parents for a bit, you’ll need to pay a double mortgage, insurance, property taxes, storage costs, and everything in between.
How can I Add Value to my Home?
- MARKETING COSTS: photography, videography, MLS listing if you’re trying to FSBO, etc
- Now we get into the transaction items:
- How about a Home Warranty? Well, you can watch our video on Home Warranties, but regardless if a buyer ever wanted to pay out of pocket for this, this is to protect the SELLER for misrepresentation on the property and fixes that happen in the initial selling period.
- Mortgage Prepayment Penalty which can be somewhere between 1% of mortgage value.
- Property Surveys etc
- Finally, we now include that little line item for the true Closing costs for the Tax Stamps, Title Search etc.
In total, the national average for selling a home is about $31,308. Or, 11%. That’s about 10x more than the statewide average for a proper definition of “Closing Costs.”
Just imagine that, you’ll probably have to sell your old home before buying a new one and the holding costs that may come with doing so. This whole process can be a bit of a headache, but hey, no worries, we’ll guide you.
Who pays for Closing Costs?
So who pays for those “closing costs”? Well, that’s negotiable but in hot markets like this one, Buyer’s are offering to cover the traditional definition of “Closing Costs.” But as you can see, that’s not a very helpful gesture if you’re a Seller… That’s awesome that someone is offering to pay the cost of a title search, attorney fees or other “Closing Costs,” but covering 1-2% of the home value in closing costs doesn’t deserve a trophy.
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Who pays for Selling Costs?
The bigger question here is who’s paying for those big ticket Selling Costs? It’s not called “Buying” costs…. It’s called “Selling” Costs and that’s for a really good reason. These are the costs to SELL a house. The realtor fees, holding costs, and the other items we already discussed.
Well, unless you’re getting your buyer to cover half of the double mortgage and inspection contingencies, this is on the Seller.
If you want the full breakdown, then go head over to our website page about the full picture for Cost of Selling your Home.
If you want to skip paying those costs, then reach out to a high-paying investor like us. We might be able to just buy it for market value minus these costs you would have paid out anyway. That means just skipping the listing process and going straight to closing for the same amount you would have pocketed anyway.[activecampaign form=3]