The real estate commission is usually the biggest fee a seller pays, but there’s a higher risk if you choose not to hire an agent and choose to For Sale by Owner (FSBO). Since selling a home is a complicated process, it’s better to have a professional by your side who will guide you through every step and make sure you get the most profit from the sale of your biggest investment.
Commissions on real estate vary by market, and could be negotiable as long as you make a deal with your listing agent right from the start.
Title insurance protects the new owner and lender in case there are issues with your home’s title. In case there’s someone else who can claim ownership over the property, either because of a dispute over the property or because of outstanding liens from contractors, creditors, or the government, this one-time payment protects the buyer from the financial burden of sorting out title issues in court, whether they arise at closing or later down the road.
Even if you are not required to hire an attorney in the state where your home is, you may want to do so especially if you are dealing with complex transactions involving distressed properties or inherited real estate.
Escrow costs are usually between $500 and $2,000, or about 1 to 2% of the home sale price. The fees for escrow are usually split 50-50 between you and the buyer.
When you sell your home, you’ll be responsible for prorated property taxes that have accrued up to the closing date, at which point the buyer or the new owner will take over. Be prepared as you may have to pay property taxes at closing to bring yourself up to date.
Aside from transfer fees, you might also need to shell out some cash at closing to make sure you’ve paid up to the close date, just like with property taxes.
