Coldwell Banker Premier Realty

Understand Your Proceeds


Knowing the Key Financial Elements After a Home Sale
Posted: June 18, 2015 by Jesse Olive

Once you have reached your ultimate goal of selling your home, you are hopefully celebrating the fact that you received your asking price from a buyer or maybe even surpassed it if you are really lucky. But most importantly, the final offer you accept should factor in several additional expenses that go along with selling a home such as closing costs and your real estate agent’s commission. If not, you could be very disappointed in the net proceeds you get from the deal after your home is sold. This final blog has been created by Coldwell Banker Premier Realty as a Q&A to prepare you for what can be a harsh reality to those who do not account for what might appear to be “hidden costs” rather than simply budgeting properly for all aspects of the sale…

1) Whose Responsibility Is HOA Seller’s Package? The seller is solely responsible for providing the buyer with this info. Agents may coordinate the ordering of the package, but some HOAs do not even allow them to order it. 

2) Why Is Title Insurance Needed? Title insurance is needed for a home to show that the buyer really owns the property and to ensure there are no problems with it before closing. Again, the seller is usually responsible for paying for the buyer’s title insurance as a means of proving the title is clean.

3) What If My Home Does Not Appraise? If your home does not end up appraising for the amount you are seeking from the buyer, you as the seller can reduce the price to the appraised value, the buyer can pay the difference in cash at closing, or either party can cancel the sale altogether because the price was not met. You can also choose to appeal the appraisal in hopes of improving it.

4) What Are Closing Costs? Closing costs usually total between 3 and 5 percent of the loan amount that the buyer takes out on a home. These costs include a number of items such as loan origination fee, loan discount fee, loan application fee, points to buy down the interest rate, lender’s and buyer’s attorney fees, appraisal fee, credit report, lender’s inspection fee, mortgage broker commission or fee, tax service fee, processing fee, underwriting fee, wire transfer fee, interest from the day of settlement to the end of the tax year, private mortgage insurance premiums, hazard insurance premiums, property taxes from the day of settlement, settlement or closing/escrow fee, document preparation fee, notary fee, title search and insurance, recording fees, tax stamps and pest and home inspection. While that is obviously a lot of items to consider when closing, all of them are typically included as part of a Good Faith Estimate (GFE). Buyers are responsible for paying the home’s closing costs, but sometimes it can be worked into the deal to have the seller pay them instead. 

5) How Much Should My Agent’s Commission Be? The standard commission rate for real estate agents is 6 percent, with 3 percent going to the buyer’s agent and 3 percent to the seller’s agent. This commission is paid by the seller. 

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