Hey there, Emily Farber from Lepic-Kroeger, Realtors. Thanks for joining me!
The topic of today's video is: Do sellers have closing costs? In other words, how
much is it going to cost to sell your house? What are the fees? The ones
everybody knows about, and the ones people don't? Stay tuned! We're gonna talk about it.
So first off, the most major expense for most sellers, and the one that everybody thinks about, is paying off your mortgage. If your house is not
paid in full, yes, you will have to pay off your
mortgage. Additionally, if you have any home equity loans outstanding those will
need to be paid off, too, because your house is no longer going to be collateral.
Second, in your purchase agreement, the deal that you agreed to
with the buyer, did you agree to any buyer credits? For instance, did you agree to
pay any portion of the buyer's closing costs? Were there any remedy agreements
that are going to be paid at closing? Things like that you'll see on your closing disclosure.
Number three, taxes. Everybody's favorite topic. Like the
saying goes, there's a few things in life that are guaranteed like death and taxes.
So, let's talk about property taxes. Here in Iowa we pay property taxes in arrears,
which means every single time you sell a piece of property you are going to owe on
property taxes. Sorry! So, even though you are up to date on the
payment of your property taxes, you're still behind because there are taxes
that are due that haven't even yet been billed. It can be a little confusing and
I have a worksheet with all the dates on it to help you figure it out. If you want
to see it visually, send me a message and I am happy to send you a copy of that
worksheet. But, yes you will owe property taxes and they will be prorated to the day of closing.
The fourth expense you're going to see is legal fees. You will have
some legal fees for updating the abstract and doing a title search.
Number five. This one's small but in the sake of full disclosure you're going to see some
recording fees for the county.
Number six. Wire transfer fees. If the payment to payoff your mortgage needs to be wired somewhere you're going to see a wire
transfer fee. Also, if you've moved far away and I can't just hand you the check,
or I can't deliver the check to your bank, and deposit it on your behalf, and
you want that money wired to you there will be a wire fee for that. It's
generally small twenty to thirty dollars but it'll be there. Alternatively, if you
think, "Oh, hey, I don't want to pay that wire fee. I want the check mailed to me." I
have to mail it through FedEx so you will see a FedEx bill.
I can't just stick it in an envelope with the stamp because there's really no way to track it.
Number seven, more taxes. The state transfer tax stamp.
The way this works is you take your total purchase price, minus the first $500
off of that, divided by a thousand, and then multiply by a $1.60.
And that is the amount you owe for your state transfer tax.
Number eight. Any brokerage transaction fees. There's usually a small fee involved for the
brokerage company to handle the number side of the transaction.
And number nine. Your brokerage commission fee. This is the commission fee that you agreed to when you listed
your property with your agent and his or her brokerage. Part of that commission
stays at the listing brokerage and part of it goes to the brokerage that brought the buyer.
Hey, I hope you found this useful in understanding the fees
associated with selling your house. If you have any other questions about
buying or selling real estate in the greater Iowa City area, I would love to
talk to you! My contact information is down below in the description box, so
reach out and I will be sure to answer your questions.
Hey, I will see you next time!