Outside of wondering how much their home is worth, the first question I usually get from sellers is, “How much money will I walk away with?”
It is important in the planning stages to prepare a net sheet to review the costs associated with the sale and how they affect your bottom line. This will not give you an exact dollar amount as changes in purchase price, closing date, and any concessions will alter that final number, but it will give you a pretty good idea of what you will be walking away with.
In putting together your net sheet, you will want to consider these typical closing costs:
Owner’s Title Insurance Policy. Title insurance protects the buyer from any issues arising from defects on title after they purchase the home. While it can be negotiated, this is typically paid for by the seller.
Tax Proration. The seller is responsible for the taxes while they lived in the home. Since taxes are usually paid once a year, this portion will typically be prorated and credited to the buyer at closing. The buyer will then be responsible for paying the full bill.
Closing and Recording Fees. The Title Company or other closing entity will usually charge a fee to facilitate the closing of the transaction, and the state will charge recording fees for the sale documents.
Real Estate Agent Commissions. In most cases, the seller will pay a commission to the listing agent. The listing agent will pay the buyer’s agent and their broker from that commission.
While this is not an all encompassing list of fees you may pay at closing, this should get you a good idea of your net on the sale of your home.