If you have never sold a home before, you may not be aware of all of the associated costs.  Don’t be surprised at the closing table.  Knowing all the costs upfront will ensure a smoother transaction.  Be sure to ask your Realtor to prepare a net sheet before accepting an offer.  A net sheet is just an estimate, but an experienced Realtor should be able to get pretty close to the actual costs.  Some of the items that you should carefully review are detailed below.

Property Taxes

You will be required to provide a credit to the buyer for the property taxes during the period of the current year that you have owned the home.  For example, if your annual property taxes are $5,000 and your closing is scheduled for March 15, the credit to the buyer will be $1,039.32 which covers your portion of the taxes from Jan 1 to March 15.  The buyer will be responsible for the full tax bill at the end of the year.  This credit will be subtracted from your funds at closing.

Title Insurance

It is common in the State of Texas for the seller to pay for the owner’s title insurance policy.  This can be a few thousand dollars depending on the sales price.  Your Realtor should be able to accurately estimate this cost and may even be able to negotiate with the buyer so that they pay for it, not you.

Buyer’s Closing Costs

With any sales contract, be sure that your Realtor has indicated a dollar amount if you have agreed to pay for a portion of the buyer’s closing costs.  Most loan programs will only allow up to a 3% contribution from the seller.  As a seller, you do not want to leave this open-ended and you want to make sure that the exact terms are negotiated and included in the contract.

Buyer’s Home Warranty

Most savvy buyer’s agents will include a dollar figure in their offers that include a seller paid home warranty.  This cost can vary from a few hundred dollars to over $1,000 dollars.  Make sure that this cost is negotiated before accepting an offer.

Transfer Fees

Homes that are part of a Home Owner’s Association will likely have a transfer fee to change that account information.  Cost can vary by association, but they are typically a few hundred dollars.  Be sure to identify the cost and the responsible party as part of the contract.

Doc Prep Fees

The title company will charge a fee to prepare the closing docs.  Your Realtor should be able to tell you if these fees are in line with other title companies in your market.

Escrow Account Refunds

If you have an escrow account with your lender, it is common for this balance to be left out of your mortgage payoff.  If that is the case, be sure to contact your lender to find out the exact amount and timeline for the balance refund.



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