Existing Mortgage(s)
This will be the biggest expense for most people.  You can get an idea of this cost from looking at your latest statement from your mortgage company, or by calling and asking for the information. 

Transfer Tax
Known in North Carolina as “revenue stamps” this is basically the sales tax, paid by the seller, for selling the home.  You can calculate this amount by dividing the sale price by 500.  For example, the transfer tax on a $200,000 sale would be $400.

Property Taxes
The way taxes are handled can vary depending on the time of year and whether or not the tax bill has been paid for the current tax year.  Basically, you are responsible for the portion of property taxes for the time you owned the home during the current tax period.  Sometimes the closing attorney will collect the proper amounts from both the seller and the buyer and pay the tax bill directly, if it is available. Tax bills are published at the end of July in Wake County.

If you sell before the bill is available, the attorney will do his best to estimate the amount of the bill and collect the prorated amount from the seller and credit the buyer.  The buyer would then be responsible for paying the entire year’s tax bill.  If the amount collected ends up being incorrect, once the actual bill is available in July, the buyer and seller can settle the difference after closing.

If your mortgage company collects a monthly escrow amount for taxes, the balance in the account will be refunded after closing.

HOA Dues
Home owner association dues are prorated as well.  You are responsible for the portion for the period you owned the house.  If you pay on an annual basis, there could be an amount collected from the buyer and credited to you for the unused portion.  However, if you owe HOA dues at the time of the sale, this amount will be collected.

Attorney Fees
This is typically a charge for the preparation of seller documents, including the deed.  Most attorneys can get this done for about $125.  You can always have your college buddy, or friend of the family, who happens to be an attorney, prepare these documents for you at a discounted price, but it is not recommended.  You definitely don’t want to have closing delayed because there was some miscommunication between the two attorneys.

Repairs
The standard contract binds the seller to making any “necessary” repairs.  There are limits of the scope of what is eligible for repair, but basically any major system that is broken must be fixed prior to closing.

For liability reasons it is a really good idea to make these repairs in good faith and to use a reputable professional.  I usually advise my clients to budget $1,000 for repairs, unless the home is very new.

Realtor Compensation
This is typically a percentage of the sales price and is negotiatedbetween seller and agent. From this amount, your Realtor will pay for all marketing and promotion expenses up front.  If your house does not sell, or you change your mind about selling, the risk of loss of marketing expenses is shoulderd by the agent.  Also, keep in mind that your listing agent will pay the buyer agent on the other side of the transaction from this amount.

Concessions For The Buyer
At the time of offer negotiations, there could be some concessions that the seller promises the buyer.  Typical concession items are a home warranty or buyer Closing Costs paid by the seller.

I hope that helps you understand the usual costs involved with selling a home. If you would like to discuss your situation, and receive an estimate of the probable selling price of your home along with an estimate of your specific closing costs, just give us a call!

William "Art" Sexton
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