If you have ever wanted a check list for closing cost......the following are definitions of typical closing costs faced by sellers:
•Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller.
•Title insurance: There are usually two types of title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title.
•Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a re-conveyance tax.
•Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property.
•Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are currently the states that collect this tax.
•Settlement or closing fee: This is usually split between the seller and buyer and covers the costs charged by the escrow company, lawyer or whoever handles the transaction’s financial transfers.
•Brokerage commission: The fee you contractually agreed to pay for the selling of your home.
•Pest inspection: Most lenders will require a pest report to make sure the property is in good condition. This is usually paid for by the seller. Sometimes the seller will be responsible for repairing areas damaged by termites, carpenter ants, dry rot, fungus, among other pests. Generally, these repairs can be negotiated and may depend on whether the market favors buyers or sellers. This can also usually be paid for directly between the seller and the pest company.
•Septic inspection: If you have a septic tank, it will likely be required by the sales contract to have it inspected. This can also be paid for directly between the seller and the inspection company.
If you have ever wanted a check list for closing cost......the following are definitions of typical closing costs faced by sellers:
•Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller.
•Title insurance: There are usually two types of title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title.
•Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a re-conveyance tax.
•Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property.
•Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are currently the states that collect this tax.
•Settlement or closing fee: This is usually split between the seller and buyer and covers the costs charged by the escrow company, lawyer or whoever handles the transaction’s financial transfers.
•Brokerage commission: The fee you contractually agreed to pay for the selling of your home.
•Pest inspection: Most lenders will require a pest report to make sure the property is in good condition. This is usually paid for by the seller. Sometimes the seller will be responsible for repairing areas damaged by termites, carpenter ants, dry rot, fungus, among other pests. Generally, these repairs can be negotiated and may depend on whether the market favors buyers or sellers. This can also usually be paid for directly between the seller and the pest company.
•Septic inspection: If you have a septic tank, it will likely be required by the sales contract to have it inspected. This can also be paid for directly between the seller and the inspection company.
Hope this helps DG students.