What are Closing Costs & How Much are They?
Closing costs are sometimes an unknown for first time homesellers. “What are closing costs for the seller?” and “How much are closing costs?” are common questions we hear.
What are closing costs?
Closing costs for the seller are fees they must pay when they sell their home to a buyer. The closing fees will be used to pay the title/escrow company that facilitates the transaction. The closing costs ensure a smooth transition between the buyer and seller. These closing costs will include the transfer of a clear title, check for liens on the property, title insurance, and other requirements that vary from state to state, such as:
- Title and Lien Search: Ensures the title for the property is correct and has no outstanding liens or judgments.
- Title Insurance: Protects the homebuyer from any issues with the title that were overlooked in the Title Search.
- Recording Fees: Your title company or attorney will file the signed deed with the county office to show new ownership.
- Settlement Fee: Paid to your title company for handling the closing.
How much are closing costs?
The average closing costs for the seller usually range between 1-3% of the home’s selling price. The seller should expect this amount to be taken from their proceeds of the sale. For example, if you sell the property for $100,000 you will pay between $1,000 – $3,000 in closing costs.
What closing costs do not include?
These closing costs do not reflect the fees you will pay your realtor, usually ranging from 5-6% of the sales price. The closing costs are not including seller concessions to the buyer. For example, if during the home inspection the buyer finds something they do not like they might ask you to cover more of the closing costs to make up for it.
What should you expect to pay in total?
You can expect to pay somewhere between 6-9% of sales for the entire transaction that includes the closing costs and realtor fees.
What are your alternatives?
When getting an offer from Meli, we pay all closing costs. You don’t have to worry about additional fees when selling your house, like paying closing costs or realtor commission. We will buy your property as-is with no concessions. The amount that we offer is the amount you will receive.
This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Meli encourages you to reach out to an advisor regarding your own situation.
