What Closing Costs Are Sellers Responsible for?

Northern Texas Real Estate Podcast with Anastasia Riley

Even after you’ve sold your home and made a profit, there are some out-of-pocket closing costs that you’ll be responsible for. Here are the big ones to know.

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Closing costs are the expenses that are over and above the price of the property that buyers and sellers pay to complete a real estate transaction. Each side has their own costs that they’re responsible for, so let’s take a look at them, starting with the sellers.

Real estate commission is the seller’s largest closing expense. Sellers in Texas are responsible for paying both Realtors, with 3% going to their listing agent and 3% going to the buyer’s agent.

Another common expense for sellers is the owner’s title insurance. It’s essentially an insurance policy that ensures the deed to the property is clean and clear with no outstanding liens or title effects. The cost depends on the state but is based on the price of the home. On a $300,000 home, for example, the title insurance policy will cost around $2,000.

Then we have the escrow fee. This is a fee that the title company charges to hold money in escrow. The average charge for this is around $400.

If your home is located in a community with a Homeowners Association, you'll likely have to pay HOA transfer fees an for a subdivision information package. The cost here varies greatly depending on the community. The average is around $350, but it can be as much as 1% of the sale price. Then, you’ll pay a few hundred dollars for miscellaneous expenses such as a closing attorney and a property survey.

The cost of HOA transfer fees varies greatly by community.

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That’s about it when it comes to seller closing costs. Another thing to note is that buyers typically expect sellers to contribute a few hundred dollars toward their home warranty, but it’s not required. Buyers can also ask sellers in Texas to contribute money towards their closing costs, but that really depends on the type of market we’re in.

Next time, we’ll take a closer look at buyers’ closing costs. If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

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