What Are The Closing Costs When Selling A House – Although the information on this website is provided by a qualified professional, it should not be considered legal, tax, financial or investment advice. Because each individual’s situation is unique, a qualified professional should be consulted before making any financial decisions.
Selling a home by owner is not only a challenge to find a buyer yourself, but also to calculate all the typical closing costs you have to pay at the closing table, as well as significant out-of-pocket expenses.
What Are The Closing Costs When Selling A House
In a FSBO transaction, there is no listing agent to guide you through all the possible costs and fees you may incur during and after the process. Fortunately, Kristina Morales, a licensed and highly experienced real estate agent, has taken on this task and created a video guide where she goes over the typical costs and fees that a FSBO seller can expect to pay during a “sale by owner” transaction. “
Closing Costs When Selling A Home
This guide is one of four videos on closing costs that Kristina has recorded exclusively for the platform. Here’s the full list:
In the video below, Kristina shows all closing costs classified into two categories: own costs and costs without returns. He then offers an example of calculating what a seller can net his home in a typical FSBO transaction (using the same home sales price and other parameters as in his other three guides).
In addition to the video, we also created this visual infographic to help you better remember all of your closing costs and fees without returns. Feel free to share with your friends and colleagues.
Average Closing Costs In 2023
Hi, my name is Kristina Morales and I am a licensed real estate agent in the state of California. Today I bring you the next video from the final cost series brought to you by . Let’s get started.
This is video two of the closing cost series and today we’re talking about what to expect in closing costs when your home is sold as a “sale by owner”.
FSBO stands for “For Sale by Owner” and you will hear me use the acronym throughout the show. FSBO is when an owner decides to sell their own property without a real estate professional known as a listing agent.
Closing Costs That Are (and Aren’t) Tax Deductible
The main reason sellers choose to sell “For Sale by Owner” is to avoid paying real estate agents’ fees. But here’s a little reality check. While a FSBO seller can avoid paying commissions to a listing agent, it is very likely that they will still have to pay a buyer’s agent fee. For what? Because according to a 2018 study by the National Association of Realtors, 87% of buyers used a real estate agent.
What does it mean? This means that when you are selling your home, you want your home to be seen by as many buyers as possible. You want a large buyer base. Well, 87 percent of buyers last year had a real estate agent. So if you want to show your home to as many buyers as possible, you should expect to be compensated for the buyer’s real estate agent who brings the buyer to your home.
When it comes to real estate agent commission savings, a FSBO seller can realistically save around 2-3% in commissions if they sell successfully as a FSBO. And that two to three% savings comes from not having to pay a listing agent.
Types Of Seller Closing Costs In New Jersey
In a brick-and-mortar transaction, the seller pays all marketing costs, while the real estate agent is responsible for paying marketing costs. Let’s go through some basic marketing costs.
This is very basic and not all encompassing, but as a FSBO you can expect to receive photography. Photography can range from $350 to $650. Of course, if your house is very large, this can be more. It depends on where you are and what kind of marketing you do. So if you have a luxury property, it’s probably over $650.
The next thing is videography. People want to see how your home feels, and a video is the perfect way to market your home. Video recording is becoming more common all the time. So you can expect to spend anywhere between $400 and $600. Again, above or below this range depending on the size of your home, location, and the type of marketing you hope to achieve.
Closing Costs In Florida For First Time Home Buyers And Sellers L Meridian Trust
So that’s your printing cost. Costs for printing brochures, printing postcards and printing leaflets. You can expect anywhere between $300 and $500, depending on the number of prints you request. But printing costs are real costs, and you want to get quality print materials.
If you’re going to send out a blast mail – “hey everyone, my house is for sale” – well, that’s $650 or more. So it really depends on how many people you’re going to market to, and it’s very expensive. But these are just some of the basic marketing expenses you may have if you want to try to sell your home successfully on your own.
Probably the biggest cost to a salesperson is time and only you can judge how much your time is worth.
How To Calculate Closing Costs On A Nc Home / Real Estate
The list goes on. Selling a home is very time-consuming, so you need to think about what else you can do.
“What am I giving up when I decided to sell my house myself? And is it worth it? Is it worth saving that 2-3% of the commission can’t be used for other things?”
In one video, we talked about out-of-pocket expenses and went through all of these in detail. So if you want to go through them in detail, go back to video one where we talk about these expenses.
Who Pays Real Estate Closing Costs In Nyc?
When selling with a real estate agent, most of it remains unchanged. Guess what’s different? It incurs an additional cost and this is a marketing cost because marketing your home is the right way to sell your home. And so, this is an expense you have to have before your home even hits the market.
Now you have the closing costs, which are the net proceeds at the time of closing. Again, all of these remain the same as previously discussed in the first video. For more information, return to that video.
Now let’s go through an example. We will use the same example as in the first video.
Closing Costs Brochure Editable Closing Cost Infographic
In the first example, we said our purchase price was $250,000 with no mortgage balance. We have to pay a commission. In this example, we pay 3% of the buyer’s agent fee. Escrow and transfer tax remain unchanged. And we are in the state of California.
The only difference between this and the one discussed in the video is the commission. So instead of paying 6% commission, you pay half of that, 3%.
So in this closing cost example, all the actual numbers for each item are: fees are 7,500, title fee – same as the second example, closing fees – same as the second example, and so on and so forth.
Massachusetts Seller Closing Costs
Again, the only difference between this example and the previous one is that you save half the commission. So instead of being $15,000, it’s now $7,500.
Now remember that the buyer’s agent does not get the $7,500, it is split between the agent and the broker.
And here’s a quick summary of the costs: in this example, the closing costs are $12,640, or 5.1% of the purchase price. In the first video it was 8% of the purchase price.
How Much Are Closing Costs For The Seller
This does not include your marketing costs as they have already been paid and did not come from your closing proceeds. That’s a consideration though.
How much did you spend and how much did you save? You spent $12,640 at closing or 5.1% of the purchase price when selling by owner, compared to $20,140 or 8.1% of the purchase price when selling with an agent.
Your savings compared to selling with an agent is $7,500 or 3% of the purchase price less marketing costs (financial and your time).
Who Pays Closing Costs?
So let’s go through the closing cost series. In the first video, we talked about what to expect when selling your home with a real estate agent. In video two, what this is, what to expect when selling as a FSBO. In the third video, which is the next video, we talk about what to expect when selling to an investor (also called “cash house buyers”).
And finally, we’ll wrap up video four with a summary of closing costs, and we’ll take it a step further and talk about other aspects and weigh the pros and cons of each sales method.
Thank you so much for watching today. I hope you found “What to Expect When Selling
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