Hidden Costs in Home Selling

We commonly heard stories about “homebuyer’s remorse,” but do you know that there’s also a “seller’s remorse?” This happens whenever a seller regrets selling his home for such amount when it can actually be sold for a higher price. Such incident occurs because some home sellers aren’t aware that there are hidden costs that are deducted from the contract sales price. You don’t want this to happen to you right? So better educate yourself about the hidden costs of selling your home.

Closing costs. If you agreed to pay for the closing costs on behalf of the buyer, then you need to put a limit on the amount you want to be charged. Because if not, it’ll be like a blank check allowing the lender to charge fees they usually waive once the buyer commits to paying the closing costs.

Commissions. If you’ve hired the professional services of real estate agents, you should expect to pay them at the end of the home selling process. As what the law states, the commission of an agent can range from 3% to 6% of the contract sales price but you can negotiate to get a lower rate if the agent allows you too. Just be sure to review their commission on the closing statement if there are any errors.

Deed or Recording Fees. A deed is a legal document that transfers title to a piece of property, which are written lawyers contracted by the title company. As a seller, you will need to pay for the preparation of the deed, which has to be recorded with the county property records to formalize the transfer. The county will charge fees to record the document and the home seller has to pay for this.

Mortgage balance. This shouldn’t surprise you because if you plan to sell your home, then you have to pay off your mortgage balance. Any remaining balance on your mortgage will be deducted from your sales price.

Notary and Document Preparation Fees. The escrow company charges fees to prepare the necessary closing documents. Therefore, before you do this, call a few escrow companies to ensure that they’re competitive with other similar companies in the area.

Tax Certificate or Prorated Taxes. Aside from the mortgage balance, a home seller has to pay the outstanding property taxes owed on the property. In most states, the owners usually pay their property taxes in arrears wherein taxes are paid for the preceding year. At the same time, the seller will need to pay for the prorated, estimated taxes for the property before selling it.

Title Insurance. If you bought or refinanced your house within the last 24 months, you will usually qualify for a discount on your title insurance premium. However, if you’re charged with the full premium, be sure to ask for a re-issue rate.

Transfer fees. In most states and local municipalities, transfer fees will be charged once a home is sold. Therefore, you have to know whether there’s a transfer fee in your area and the amount that will be charged and how it was computed.

Remember that once you arrive at the closing, you need to carry with you your estimated closing statement and comparing it with the actual one. In this way, if there are any discrepancies, you can still get a chance to save a few dollars by simply asking a few questions.