Once the closing date is set, the excitement really grows because you
are only a step away from selling your home. Be careful not to go to the
table without knowing what to expect. It is important to know the procedure
including buyer and seller closing costs, so that you can stay on top
of everything- especially your buyer's portion of the transaction since
they may be asking you to share in some of their expenses. The total closing
costs will vary depending on the type of loan the buyer has, the location
of your home and the complexity of the transaction. To learn more details
about the elements of the purchasing agreement click the button at the
top.
Now we'll go through
the components involved in the closing process. The first component
of the costs is marketing fees- commonly referred to as commission.
The next component of closing costs are origination fees which include
a loan origination fee, an appraisal fee and the cost of ordering your
buyer's credit report. Other related costs may include hazard insurance,
mortgage insurance and any interest accrued on the mortgage from the
closing date to the end of the month. Then there are the optional discount
points for the loan. This is a one-time fee that is paid at closing
and varies depending on the loan amount. Some buyers choose to pay this
amount up front to reduce the ongoing cost of the mortgage while others
choose to have the seller pay for this as a stipulation in their offer.
The taxes and any miscellaneous items (which vary according to the requirement
of your local government) can include personal property taxes, homeowner's
association dues, and other local assessments. As a seller, you will
be required to credit your portion of unpaid property taxes to the new
owners- we will be able to arrive at a very accurate estimate of this
when we meet. The contract will stipulate who is responsable for these
costs, with the exception of the marketing fee. Supplying the closing
agent with closing instructions.
Next is the documentation or "Doc Fees". This covers the cost
of researching public records to trace the title and ensure that the
property can be legally turned over to your buyer at closing. Other
doc fees include recording and transfer fees that cover the legal transfer
of the deed from your name to the buyer's name. Some of these fees are
variable depending on the structure of the offer that you receive.
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