Closing Cost for Seller

CLOSING COSTS WHEN SELLING A HOME

Both buyers and sellers have closing costs associated with a real estate transaction. That’s why it’s important for sellers to estimate these costs in advance to determine how much they’ll actually receive once the sale is finalized.

Most Common Closing Costs for Sellers

• Mortgage Balance – The outstanding balance on your current mortgage, including second mortgages or home equity lines of credit.

• Loan Payoff Fee – An administrative fee charged by the lender to process the loan payoff.

• Debt Clearance – Any unpaid debts such as contractor fees, property taxes, or legal judgments must be paid before closing.

• Prepayment Penalty – Some loans charge a fee for paying off the mortgage early.

• Recording Fees – Costs to officially record the satisfaction of liens and debts.

• Agent Commissions – Typically 6% of the sale price, fully paid by the seller and split between the listing and buyer’s agents.

• Notary Fees – Paid for verifying the identity of the signing parties.

• Escrow Fees – Charged by escrow agents who receive lender funds, disburse payments, manage deposits, and distribute sale proceeds.

• Title Search Fees – Confirms the seller legally owns the home and checks for liens. The title company provides a commitment of title insurance based on this.

• Seller Concessions – Any amount the seller agrees to contribute toward the buyer’s closing costs.

• Repairs – Required repairs agreed upon during negotiations or mandated by the lender before closing.

• Home Warranty – Optional coverage offered to the buyer for the first year after purchase.

• Termite Clearance – Required in some areas, certifying the property is termite-free.

How to Estimate Seller Closing Costs

For practical purposes, seller closing costs can be estimated as:

• 1.5% of the sale price
  PLUS

• Accrued property taxes up to the date of sale
  PLUS

• Outstanding mortgage(s) or lines of credit
  PLUS

• 6% agent commission on the sale price

Summary:
Seller closing costs include mortgage payoff, agent commissions (6%), escrow, title, and possible repairs or concessions. Estimate 1.5% of sale price plus property taxes, loan balances, and extras to know your final net proceeds.