Once an offer has been accepted on a home, many Charleston homeowners start to think about the money they will receive from the sale of their home. Closing costs are the fees that are due at the closing of the real estate sale and are what most people overlook when calculating how much profit they will make off the sale of their home.
Calculating closing costs for the seller is important because it helps in knowing just how much money a seller can expect to make off the sale of their home.
One of the benefits of closing costs is that most sellers don't need to pay them out of their own pocket. Unless you have very little equity in your Charleston, SC home, closing costs are normally deducted from the proceeds of the sale of your home at the closing table.
Three days prior to the actual closing, you and the buyer will receive a closing disclosure
. The closing disclosure lists all the details of the sale with actual numbers so you can know the true costs and fix any errors before the closing day.
We will go over the typical closing costs that sellers have to pay so you know how to calculate your closing costs.
Typical Closing Costs
Closing is when the buyer pays up, the seller gets paid, the paperwork is signed, and everyone else is paid as well. There are taxes, commissions, fees, and loans that need to be paid before the title can transfer from the seller to the buyer.
Typical considerations when calculating closing costs:
- Mortgage/Lien Pay-Off
- Real Estate Agent Commissions
- Transfer Tax
- Property Taxes
- Owner's Title Insurance
- Escrow and Closing Fees
- HOA Fees
- Seller Concessions
- Attorney’s Fees
Before the sale can take place, any liens or mortgage against the title must be
satisfied. Mortgages are loans that are secured by using your property as
collateral, and liens are debts that are attached to your home by the courts. Liens
can come from unpaid court judgments, debts, or bills from contractors.
Once you have signed your closing documents, your lender will contact you and
let you know how much money is needed to pay off your mortgage.
If there are no mortgages or liens on the Charleston SC home, then this line item
should not appear on the closing statement.
Calculating Closing Costs
Real Estate Agent Commissions
Real estate agent commissions are the most significant closing costs that a
seller has to pay next to satisfying any mortgages or liens. Typically, both the
buying agent’s and listing agent’s commissions are paid by the seller.
You can normally expect this number to be 6% of the sales price, 3% to the listing
agent, and 3% to the buying agent. This commission is paid to compensate the
agents for marketing your home, facilitating the transaction, and handling all the
other details associated with selling your home
If your home sold for $500,000 and the total commission was 6%, you would pay
$15,000 to the buying agent and $15,000 to the listing agent.