If you’re selling your home, the last thing you would expect to be responsible for is any sort of cost or fee. In the world of most other private sales of big-ticket items, such as motor vehicles for an example, a seller isn’t responsible for paying for the buyer’s first insurance policy or title and registration fees, yet somehow it seems that many sellers will end up having to pay analogous fees to finalize any home sale. This can be both frustrating and confusing for sellers who simply want to be free of the house they’re trying to get rid of.
These costs and fees that you’ll have to encounter are in no ways standard. Many of these fees will be negotiable, which is something that you will have to discuss with your Realtor whenever he or she alerts you to an offer being made on your property. A few of these costs are considered “customary,” which is to say that sellers traditionally will be responsible for these costs. However, in situations where the seller may not have much in the way of financial ability in order to pay for these costs and fees, buyers may offer a fixed offer that will encompass the cost to the buyer for absorbing these costs. This sort of arrangement is legal in many states – one of which being Texas, for example.
On the other hand, there are some laws that apply on the Federal level that will see you holding the bag when it comes to transaction costs and fees. If a buyer has qualified for a VA or FHA loan and they are using the funds from that loan to purchase a property, Federal law prohibits certain classes of these buyers from being responsible for paying these fees. In such a scenario, you as a seller will be bound by law to pay these fees instead; this is something that you will have to verify with your title company upon receiving an offer from a buyer with one of these types of loans.
Thankfully, the majority of these costs and fees are fixed at a particular dollar amount. This means that you won’t have to worry about too much variance caused by the sale price of your property. However, there are some exceptions to this rule. The Realtor’s commission on your property is of course one that is directly related to your sale price, but this is a fee that you would be responsible for anyway. Other requirements would be the Title Policy, which is a fee set by the insurance board for your state. In most states you can easily estimate how much this will cost you, as it’s typically around 1 percent of your sale price – though it’s more often less than this estimate. Additionally, you will be responsible for your property taxes on the house for the year, though they will be pro-rated to the date of closing on your sale, as will any Home Owner’s Association (HOA) fees if applicable. All in all, an excellent rule of thumb when it comes to the total costs of selling your house is to budget around 2 percent of the sales price of the home. In addition, you’ll need to combine this with the commission your Realtor is receiving as well as taxes and HOA fees for a relatively accurate assessment of what you’ll be paying for the privilege to sell your house.
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