Know The Costs of Selling a Home - Central Ohio Real Estate Blog

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Know The Costs of Selling a Home

You are at the point of your life when you have to pack up your things and sell your home. So you sit down and write a list of all the things you have to do, from getting a real estate agent to staging the home. You also mark down how much each home-selling task will cost you while setting aside the necessary funds you’ll need to pay before the house sells and after the closing transaction.

But did you really set aside enough money? Many homeowners are surprised by all the costs there are when selling a home. From paying capital gains taxes to purchasing home warranties or repairs for buyers, you may have to dip into your own pockets to pay certain expenses so the transaction for your home goes as smoothly as possible. Here are some expenses that first time sellers may not be aware about.

Deed Writing and Recording Fees

When the title is transferred from the seller to the buyer, the title company incurs costs for writing the new deed and recording it with the county property records department. These two expenses are normally paid for by the seller of the house.

Transfer Taxes

Local municipalities, counties and states may impose a real estate transfer tax when a property title is transferred from the seller to the buyer. The amount that you pay can vary based on your location. You may have to pay a flat fee or you could pay a percentage of the sales price for the house.

Home Warranty Concession

Some buyers may be wary about the age of the appliances and the home’s mechanical systems. They don’t want to move in only to discover that it requires major repairs that were not uncovered by home inspections or may have developed during the time that the closing transaction takes place.

A seller has the option to purchase a home warranty to put the buyer at ease and entice them to close the deal. The warranty can cover repairs to electrical systems, heating and cooling mechanical systems, plumbing and even roof issues.

Mortgage Balance

Are you still paying a mortgage loan? The mortgage has to be paid off at the sale of the home, usually as a deduction from the sales price you agreed to from the buyer. Some mortgage lenders place in a prepayment penalty into their loan agreements. So you have to see if you have to pay such a penalty.

Escrow Fees

Buyers will often place the money into an escrow account until the transaction is completed during the closing process. As the seller, your signed deed will also be placed into escrow while waiting for the entire transaction to go through. The title company will require an escrow fee for these services as the seller is normally the party to pay such a service.

Capital Gains Taxes

If your home has gone through a drastic increase in appreciation, then you will likely have to pay a capital gains tax. The capital gains tax is calculated as the difference in the selling price of the house and the home’s purchase. Then you subtract the value of the improvements that were made to the house. There are many exceptions to the capital gains tax that can lower what you have to pay, and you can also subtract some of the costs associated with the sale of the house.

You can speak with your real estate agent to talk about all the costs that you may have to pay when selling your home. Understanding these costs can help you set the right amount of money aside to cover the expenses.

2016 Blog Siganture

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