Want to sell your house in Milwaukee… but not sure how much it’s going to cost you?
Well, you’re not alone.
We’ve worked with lots of homeowners in the Brew City who wanted to determine how much it’d cost to sell their house.
Because obviously… you want to make as much money as possible.
So in this blog, we will discuss:
- What Are Closing Costs?
- How Much Are Closing Costs?
- Who Pays Closing Costs?
- What Are Seller Credits?
- Can You Avoid Paying Closing Costs?
Let’s get to it…
What Are Closing Costs Exactly?
Closing costs simply refer to a myriad of costs that are paid when a property is bought and sold. Anything that is taken off of your purchase & sale price can be considered closing costs. Generally, these costs are composed of:
- Notary fees
- Transfer Costs
- Transfer Taxes
- Appraisal Costs
- Inspection Fees
- Origination Fees
- Recordings Fees
- Title Insurance
- Underwriting Fees
- Bank Fees
- Courier Fees
- Wire Transfer Fees
- Liens against the home will need to be paid to clear the title
- Credit Report Fees
- Administrative Fees
- Attorney Fees, If Applicable
- The balance of your mortgage or loans against the home
- Possibly repairs or pest control if this has previously been agreed upon
- Real Estate Agent Commissions
How Much Are Closing Costs in Total?
The amount paid in closing costs depends largely on the sales price of the home. Any professional services provided during the closing process are charged as a percentage of the final purchase price. Typically, the seller will pay between 5% to 10% of the sales price and the buyer will pay between 3% to 4% in closing cost.
However, this can be a point of negotiation as buyers can offer to pay a bigger portion of the total costs to further solidify their intent on buying the seller’s property.
Who’s Paying for All of These Costs?
While every one of these costs is negotiable, it is customary for the seller to pay for 100% of agent commissions, that is, 6% of the sales price. The remaining costs are usually split between buyer and seller, depending on what was agreed upon, and these costs can range between 2 to 6%. Usually, the seller will pay another 2-4% while the buyer will pay any costs that are left.
As a seller, you will also need to pay your share of the year’s property tax, up until the day of closing. Any HOA fees or other community costs should be prorated and paid at this time as well.
What Are Seller Credits?
This is an amount negotiated between the buyer and seller. It’s usually a fixed amount that the seller agrees to pay towards the closing costs. For example, you can offer to put 3k towards closing to help relieve some of the costs for your buyer. Overall, paying these subsidies is often a small price to pay to bring buyers to the table!
Can You Avoid Paying Closing Costs?
Yes! By working with a direct buyer who will pick up all costs associated with the closing! At Dairyland Home Buyers we will not charge you a commission, as we are not agents. We always pay for all closing costs, which will save you money and hassle at the closing table.
Are Repairs Included?
This is another one that is negotiated between the buyer and the seller. If the home is in need of some obvious repairs, the seller will often take care of these before putting their home on the market. However, if an inspection shows additional repairs are needed, a buyer may make his offer contingent on repairs being made. A buyer and seller can work this out before going to closing.