What Closing Fees are a Home Seller Responsible For?
Buying and selling a home comes with a set of associated fees – the good news is, the fees are split between the buyer and the seller so there is no one entity responsible for paying everything.
In Texas, the home seller pays the following fees:
Real Estate Commission – This is how real estate agents earn their keep. This is always paid by the seller and is split between the listing agent and the buyer’s agent. A portion of that commission is also given to the respective agent’s brokerages. In Texas, the average real estate commission is 6%.
Title Insurance Premiums for Owner’s Policy – Title Insurance Policies protect a homebuyer if a third party has a claim on the property. This could be a lien or easement.
Escrow Fee (Half) – Escrow fees cover the cost of placing Earnest Money in escrow. These fees include the cost of paperwork and the exchange of funds. It is typically paid to the title company or directly to the escrow company.
All Loans in the Seller’s Name and Secured by The Property – If your home is used as collateral on any loans (besides a mortgage), you will need to settle those loans. Since you won’t own the property any longer, it won’t be useful collateral for the lender.
Mortgage and Interest Through Closing Date – When you sell your home, you will also be responsible for paying off your mortgage and any related interest on the loan. You might also have to pay an early repayment fee if you pay off your mortgage early.
Home Warranty (Or According to The Contract) – Although these are not required in a sale, they often make a home easier to sell. It protects major appliances and home systems from breaking down due to natural wear and tear.
Any Judgments, Tax Liens, Etc., In Seller’s Name – You are responsible for clearing any fees still owed on the house. These fees do not transfer to the buyer.
Any and All Taxes Currently Due – If there are any property taxes due from the previous year(s), the seller is responsible for paying those off.
Tax Proration – This is a fee that ensures the new buyer is only responsible for the property taxes for the time they owned the home that year. For example, if a home is sold six months into the year, the seller would be responsible for property taxes for half of the year.
Any Applicable Homeowner’s Association Dues – If you still have HOA fees due, you will need to settle those up before you sell your home.
Recording Charges to Clear All Documents of Record in Seller’s Name – You’ve got to get your name off any documents related to the property so the buyer can put their name in.
Accommodation Signing Fees for Mail-Out Closings (If Applicable) – If you are not able to attend your closing in person, you can do a mail-out closing. This allows you to close on a house from a distance.
Deed Preparation – These are the fees for the preparation of the final legal papers including the deed of trust.
Do you have more questions about the fees associated with selling a home? Contact me today and I will walk you through the entire process.