If you’re finally selling your home, your mind is probably racing with the money you’ll get from your property. Unlike renting, or leasing, owning a home and paying off a mortgage is all based on the hope that you’ll either be able to pass it down in the family or sell it and make some profit. Unfortunately, selling your home isn’t entirely about the profit: there are more than enough fees and costs that come flying your way!
Here are the top charges to prepare yourself for.
Taxes
The largest tax you’ll have to worry about is the excise tax. A type of sales tax, this tax charges you for a portion of the income you make off of your home. Although it won’t be much compared to how much money you get from your house, it’s still enough to weigh you down if you don’t plan for it.
Escrow Fee
Although it would be nice if the buyer could hand the money directly to you, unfortunately, it doesn’t work this way most of the time. Instead, the escrow fee occurs when the money trades hands through an intermediary who ensures the deal goes smoothly. They take care of checks, ensure that any funds are transferred safely, and help the value go on without anyone getting shorted.
Agent Commission
If you decide to use an agent to sell your home, you’ll have to pay them a portion of your earnings. Most agents charge between three to six percent and take it out after the sale is completed. Although you can avoid this fee by not hiring an agent, they make the deal go on without a hitch and are highly recommended.
Remaining Mortgage
In most instances, people who sell their homes don’t own them in their entirety yet. Instead, they still owe a large portion of the home’s worth from when they bought it. This portion has to be paid off immediately and should be considered when using a seller closing costs calculator.
Title Insurance
Although who ends up paying for title insurance can vary from home sale to home sale, it’s the seller paying it more often than not. This process protects owners and lenders from any damage or property loss they’d suffer from liens or defects in the property’s title.
Inspection
Every home needs at least two inspections during a sale: one by the seller and one by the buyer. This inspection notifies you if anything should be worried about or looked at and gives you the chance to make some repairs before a buyer arrives. You do have to disclose anything your inspector finds, so you must make tangible changes if anything is wrong with the property.
All of these costs may seem a little overwhelming to have dumped on you when you just came into some money, but they’re all necessary. The only way these costs may get worse is if the buyer tries to haggle and having you pay some of their closing costs too, which unfortunately happens pretty often!
