An Overview of Common Home Sale Closing Costs
July 10, 2016
July 10, 2016
- Broker & Agent Commissions. Real estate agents who list a home, and those who represent the buyers, normally receive a percentage-based commission on the sale. The amount—customarily 5-6% of the sale price—is set in the listing contract, and the fee is usually split between the buyer’s agent and the listing broker.
- D.C. area home sales normally trigger payment of three different taxes: a transfer tax(equal to 1.1% of the sales price for sales under $400,000, and 1.45% of the sales price on higher amounts), a recordation tax(calculated using the same percentages as the transfer tax), and property taxes due and unpaid before the date of sale.
- Water Bill Escrows. Sellers normally have to escrow a few hundred dollarswith the settlement agent to ensure they don’t leave buyers with an unpaid water bill.(This gets returned to the sellers if their final water bill is paid before closing.)
- Recording Fees. The costs of recording the transfer deed and the deed of trust (a document evidencing the buyers’ loan) normally run around $200.
- Lender Fees.Lenders may charge buyers a variety of fees, which also vary by state, loan type, and loan amount. Before buying a home, it’s wise to interview various lenders and ask for a breakdown of the costs and fees that might apply to your new home loan.
- Settlement Fees.These fees (normally a few hundred dollars) are charged by the settlement agent (customarily a title/escrow company or a lawyer), in return for performing services related to the sale.