OT: Closing Costs

[StitchesGr8Fan]

My parents think I'm being taken on the closing costs on the house I am trying to sell. My real estate agent fee is 5%. Is this normal?

 

[makelab]

customarily it is 6%, and that is split if there is an agent representing the buyer. as long as the 5% is split with the buyer's agent (if there is one), and you do not pay anything beyond that, i think you are ok. there are other closing costs that are usually split between buyer and seller, which may add ~1%, depending on your county and state transfer taxes.

 

[Tonya2426]

6% is the norm in my area. In this real estate market though you can always try to negotiate the commission rate. Good Luck!!

 

[christygobar]

Yes, what everyone else said. 6% is the norm, looks like they gave you a break at 5%, and the buyer's agent would get half of that. (The buyer doesn't pay either agent's commission, it is all on the seller.)

As for the other closing costs, taxes, fees, etc, it can be a few thousand dollars as well. If you have never sold a home before, it really is amazing how much it adds up! I broke exactly even when I sold my home last year and was really hoping to have made a little more but those costs do add up.

As part of a negotiation, it happens somewhat frequently (or it did when I both bought and sold my house, same with my now-DH) that the buyer asks the seller to pay their closing costs too, so that is something to keep in mind when negotiating.

Good luck!

 

[dpuck1998]

I've sold 4 houses and have paid between 4 and 7 percent depending on the size of the house.

 

[MM32830]

Do you mean broker commission or closing costs?

Closing costs in the real estate business are all the costs related to purchasing (and some are related to selling) the house that are paid at time of closing. Some of these are the appraisal, doc taxes, survey, prepaid expenses (typically for real estate taxes and insurance), and so many more expenses. Most of the time most of the closing costs are paid by the buyer but this can be negotiated whereas the seller pays a portion (or all) of the closing costs.

Broker commission is a fee paid USUALLY by the seller and these usually range from 5-7%



___________________
Armand

 

[A.Mickey]

Ok, now I have the opposite question. If you are a buyer how much do you spend on closing costs and everything. We have yet to buy our first home.

 

[Golf4food]

Ok, now I have the opposite question. If you are a buyer how much do you spend on closing costs and everything. We have yet to buy our first home.

Depends entirely on your location and what you buy. You'll pay pre-paid interest, pre-paid insurance, taxes, etc. in addition to down payment money. You don't pay any agent commission, as mentioned above - that is all on the seller. Besides the down payment, which depends on your loan and the amount of the house, the pre-paids will probably be at least $1,000 total up to a few thousand total.

 

[Derby4me]

I would also suggest requesting a copy of the settlement statement from the title company prior to closing. This will break everything down and give you the specifics you/your parents may be looking for.

 

[StitchesGr8Fan]

My agent told me I have to pay the following as the seller:
Attorney fee (I get this one)
Taxes for the prior year and any months I've owned it this year (I get this one)
Survey (its a condo, why does it have to be surveyed and why do I have to pay it)
Title insurance (shouldn't the buyer pay that?)
Commission(I get that)
Other misc expenses

I'm not sure I should have to pay for all of that as the seller. Maybe I am getting taken.

 

[aGoofyMom]

Ok, now I have the opposite question. If you are a buyer how much do you spend on closing costs and everything. We have yet to buy our first home.

Check your area for classes taught for first time home buyers. Our local Community College offered a class on what to know before buying your first home. You get local information regarding costs, taxes etc and lists of people in the Real Estage, Mortgage Brokers, home inspectors and such that you may want to deal with.

I wish I could offer more to the OP but I got nothing.

(DH took the class, not me!)

 

[Tonya2426]

My agent told me I have to pay the following as the seller:
Attorney fee (I get this one)
Taxes for the prior year and any months I've owned it this year (I get this one)
Survey (its a condo, why does it have to be surveyed and why do I have to pay it)
Title insurance (shouldn't the buyer pay that?)
Commission(I get that)
Other misc expenses

I'm not sure I should have to pay for all of that as the seller. Maybe I am getting taken.

The question of who pays for title insurance seems (from my experience) to vary from state to state (or area to area). When I bought my house in SC I paid for the title insurance but when we went to sell my grandmother's house in FL the attorney told us that the seller paid for title insurance. I told him that was ridiculous and we weren't goning to pay it and the buyer should pay for it - so that is what happened. I still don't understand what the rationale for a seller paying for insurance for a buyer but it seems to happen in some places.

My recommendation is to discuss this matter with your attorney.

 

[MM32830]

The question of who pays for title insurance seems (from my experience) to vary from state to state (or area to area). When I bought my house in SC I paid for the title insurance but when we went to sell my grandmother's house in FL the attorney told us that the seller paid for title insurance. I told him that was ridiculous and we weren't goning to pay it and the buyer should pay for it - so that is what happened. I still don't understand what the rationale for a seller paying for insurance for a buyer but it seems to happen in some places.

My recommendation is to discuss this matter with your attorney.

There is SELLERS title insurance and BUYERS title insurance. If you are buying and have a mortgage chances are the bank will require you to buy title insurance and you have to pay for it.

If you are a seller, you don't need to buy title insurance (no one is going to make you do so), but you may want to do so to protect yourself.

Heck, most people don't even know what title insurance is for. Having title insurance protects you from "defects" in the title. If there was a lien on the property that was not discovered in the title search but was found after the sale, the title insurance will protect your interest in the property.

Like any insurance, you buy it for peace of mind. Hopefully you will never need to use it but if something happens you'll be happy that you bought the insurance.




_________________
Armand