Closing Costs for Sellers

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Closing costs are an assortment of fees—separate from agent commissions—that are paid by both buyers and sellers at the close of a real estate transaction.  While buyers have more items to pay for at closing, it’s often up to the seller to cover the commission for both agents. Closing costs for sellers are deducted from the profit you make on the home, unless you have low equity, in which case, you may need to bring some cash to the table to cover the expenses.


The following items can be included in seller closing costs:

Title insurance fees
Title insurance ensures that the home is truly yours to sell, and protects the buyer’s investment in the case that someone else makes a claim of ownership on the home. Sellers pay the new owner’s title insurance premium. This number varies widely depending on where you live, and the title company you work with.

Loan payoff costs
Mortgage payments are paid in arrears, unlike rent, which is paid in advance. Paying off your existing loan may actually cost more than the remaining balance because lenders charge for prorated interest. One trick for getting a rough estimate of what you’ll owe is to add one mortgage payment amount to your current balance.

Prepayment penalties
Some lenders charge prepayment penalties for paying a loan off early. These penalties can be anything from a percentage of your remaining balance, to a sliding scale fee based on the age of your loan. You’ll need to check with the lender to determine whether you have a prepayment penalty and what the costs of that penalty may be.

Unpaid HOA dues and HOA transfer fees
As the seller, you’ll owe any unpaid dues to your homeowners association at closing. The HOA may also charge fees for transferring the property to a new owner. Some of these transfer fees will be outlined in your home purchase contract. According to Movoto, you should expect the fee to cost between $100 to $400. You can also contact your HOA to get a clear understanding of what you will owe.

Transfer taxes or recording fees
Transfer taxes or recording fees are taxes charged by your state or local government when you transfer a title from one owner to another. Each state handles these differently. In some states, there are flat fees, while in others, the fees are a percentage of your sale price.

You can find your state’s specific information on the National Conference of State Legislatures website. Here’s a breakdown of transfer taxes in a few different places.  For counties with more than 700,000 people, the tax is .25%. Counties with a population under 700,000 may also impose an additional transfer tax of .01%.

Attorney fees
Illinois requires an attorney to represent you at closing. Attorney’s fees can cost anywhere from $150 to $350 an hour.  Depending on the complexity of the transaction expect to pay $500 to $2,000 when you hire an attorney.

Buyer credits
If you’ve agreed to cover any of the buyer’s closing fees in your contract, you’ll pay for that at closing. Buyer credits are entirely dependent on what you negotiate in your agreement.