When selling your Albuquerque home, knowing how much it will cost you is vital. It is common for sellers to be shocked when closing day comes since they didn’t do their homework or hire an experienced real estate agent. Would you like to sell your home? Find a realtor that you can both trust and rely on for your fiduciary interests. You will do yourself and your finances a favor. From closing costs to appraisals, this will help you navigate all expenses that selling your home entails, without any upsetting surprises at the close.
Closing Costs
In closing on a home sale, you pay off the title to the property and transfer all documents and funds to the buyer. From beginning to end, several parties will be involved, including the title company, the buyer’s agent, the new lender and possibly an attorney. All of these parties are responsible for guiding the closing process and making sure the legal documents and money are handled properly. There are many different factors that go into closing costs and they vary depending whether you choose to sell with a trusted agent or choose a for sale by owner. As the seller, you can expect to pay anywhere from 1% – 3% (after agent commissions).
Guaranteed Costs
- Paying the agents – Upon closing, expect to pay both your agent as well as the buyer’s agent 2% – 3% each. This might be lower if you choose for sale by owner because there would only be one agent (the buyer’s agent) to compensate.
- Transfer Tax – This ranges depending on location but you can count on paying tax when your title is transferred from yourself to the buyer. Depending on where you’re selling, you could pay anywhere from $100 – $10,000. This should be something you make a point in researching before you list your home so you aren’t sticker shocked on closing day!
- Prorated Property Taxes – Even if you sell your home in the beginning of the year, you are still expected to pay the prorated amount that you owe on the property taxes up to the date of the close.
- Closing Cost Credits – If you find yourself in a buyer’s market, you might need to offer a little extra to the buyer to entice them to purchase your home. This could range from covering some of their closing costs to including a one-year home warranty.
- Escrow Fees – Both the seller and the buyer are responsible for putting down an escrow that will be held until closing day. For a seller, this is typically 1% of the sale price. This money will go toward covering various fees and costs contingent with the close.
- Any Remaining Amount Owed – This could range from HOA fees, insurance, outstanding maintenance payment and utility bills. You are still responsible for any costs you have accrued while you lived in the home until the closing day. This is another wonderful reason to have a trusted real estate agent at your side because questions often come up about this topic.
Possible Costs
- Attorney Fees – This is contingent on your location and the situation of the sell. Some states require an attorney to be hired to oversee the selling process but it’s often encouraged, regardless. For whatever the circumstance, if you have an attorney representing you, plan to pay them anywhere from $400 – $1,200.
- HOA Fees – If you live in a home or a condo that has an HOA, you might be responsible to pay a prorated amount or a transfer fee to the buyer.
- Appraisal – This is typically handled by the buyer but every once in a while, a circumstance arises where the seller covers this cost. Whether it be due to a closing cost credit or you are trying to sell in a rush so you have the home appraised yourself, expect to pay an appraiser $300 – $450.
- Title Insurance – This is typically the buyer’s responsibility but there are rare circumstances where the seller will be responsible. The average cost for this insurance is $1,000 but it does depend on the final price of the home.
Miscellaneous Costs
- Cleaning – This can obviously be done by you but if you’re planning on having open houses it doesn’t hurt to hire a professional to make sure the house is looking as good as new. This will also take a little bit of stress off of you!
- Home Improvements – Think of improvements as the steps you take to get your home ready to sell. This could be anywhere from painting the interior of your home to updating your kitchen. Before you take action on any improvements, talk with your realtor to make sure they are financially beneficial and will actually increase the value of your home.
- Home Repairs – Think of repairs as the maintenance that is done to your home due to an inspection. Whether you hired an inspector before you put the house on the market (which would be another $200 – $1,000) or you wait for the buyer to bring their own inspector, repairs will likely be required in order for the sale to go through. This could be anything from getting rid of mold and radon to fixing the roof.
- Moving Costs – This is often overlooked! Is the purchase of your new home contingent on selling your current one? Is there a contingency for the buyer? If you have to put your things in storage while you’re waiting to move into your new home or you are moving out of town, always take into account how much it will cost to move into your new home.
While closing costs for a seller might seem overwhelming, there is no need to go into it unaware or blind. An experienced, local Albuquerque realtor, like Sandi Pressley and her team, will be able to tell you from the beginning how much it should cost you to close on your current home. They will prepare you from day one on expectations for the process, timeframes and possible cost you’ll incur.
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