When selling a home or property, every property owner will incur costs which are commonly known as Seller's Closing Costs. Yet, many real estate brokers don't adequately explain what those Seller's Closing Costs are. It is highly important to understand expected closing costs, how much closings costs are, and have a breakdown detailing those closing costs.
1. Loan Balance: The principal balance of an existing loan against the property, commonly known as a mortgage.
2. Owner's Title Insurance Policy: Insurance provided by a title company, like First American Title in Everett, that protects the owner and buyer through title search, unknown liens and/or judgements
3. Half of the Escrow Fee: The escrow company's fee is for preparing the closing documents, collecting buyer's loan documents and receiving buyer's loan funds, disbursing funds to the seller, and submitting closing documents to the county for recording.
4. Excise Tax: Real estate excise tax (REET) is a tax on the sale of real property. All sales of real property in the state are subject to REET unless a specific exemption is claimed and is paid at graduated rate in Snohomish County.
5. Prorated Property Taxes: In Snohomish County, taxes due April 30th and October 1st and depending on the Purchase & Sale's contract closing date the seller may have to pay a portion of the taxes, or could receive a portion of their taxes back at closing.
6. Current Utilities Balances: The escrow company will reach out to the various utility companies, if a contract contains a Utility Addendum, to pay any outstanding balances from the seller's proceeds - these are commonly known as lienable utilities.
7. Homeowner's Association Dues: Any outstanding HOA balances the seller hasn't paid will be paid at closing by escrow.
8. Real Estate Broker Commissions: Negotiated at the time of a listing agreement, real estate commission are paid by escrow the seller's proceeds.
9. County Recording Fees: Snohomish County has document recording fees for recording the closing documents for the sale's transfer.
10. Any Additional Loans or Liens: Commonly known as HELOC (home equity lines of credit), these additional loans on a property have to be satisfied at closing to release the lien on the property. In additional, a construction lien or judgements associated with the property will be paid at closing by escrow.
There could be additional costs in your real estate sale like home inspection requests, repairs and appraisal conditions yet being case-by-case they're not included.
There they are, the 10 Common Seller Closing Costs when Selling Property. If you would like to know what your estimated closing costs would be when selling, contact us and we'll be happy to provide a Seller's Net Proceeds estimate on your home or property.