It isn’t cheap to sell your home! Now why would I say this to the audience of blog readers who might be thinking about selling your home? Because I like my home sellers to be as prepared as possible for how much it actually costs! If I fail to explain as accurately and honestly as I can, just what it will cost to sell, it’s not fair to you or me, because I don’t want to waste your time. You and I are both too valuable for that! And none of the costs I’ve outlined below, include the fee for hiring me (or anyone else) – just so you know – that’s additional.
1. Property Taxes: In Colorado we pay our property taxes in arrears – this means that you pay your property taxes one year behind. If you were to sell your house on December 31, you would owe an entire year’s worth of property taxes on one day (even though you’ve already been paying them all year – that’s for last year). I’m not kidding! Some sellers insist this can’t be so. Don’t be surprised at closing!
2. Owner’s Title Insurance: Traditionally, in Colorado, the seller pays for the Owner’s Title Insurance (while the buyer pays for the Lender’s Title Insurance), which protects the buyer from any hidden title mistakes that may have occurred while you owned the home. (YOU might know that there are no hidden liens lurking out there, but your buyer can’t know that for certain.) (YOU will want this on YOUR next home too.) On a $200,000 condo for instance, this will generally run about $1200 to $1400 depending on whether or not you refinanced or bought the home within the last 5 years (if that’s the case you might get a discount). There are many title companies who offer a free calculator on their website so you can kind of guesstimate the charges.
3. HOA transfer fees: I’d love to tell you I know exactly what your HOA will charge you to take your name off the documents, but it seems to change all the time. Check with your HOA to be certain, but in many cases it can run several hundred dollars. A recent closing cost the seller $500 for the HOA to process the paperwork. (If you don’t have an HOA in your neighborhood, never mind!)
4. Buyer’s Inspection: The inspection can often be the scariest part and the costliest part of the transaction if you’re the seller. Who knows what the inspector will find! It’s a good idea to get a pre-inspection of your own, so you know what needs to be fixed beforehand. At the very least, get your furnace, a/c, and fireplace cleaned and serviced by a licensed HVAC tech beforehand. Nearly every buyer requests this. Find a Groupon, get it done yourself, and then leave the receipt for the buyers to show it was done recently.
5. Escrow for utilities: Your water and power companies will likely require that a certain amount be held in escrow to make sure all those bills have been squared away. Even if you’ve never paid Xcel bill late in your entire life, they require that money be set aside at closing just to make sure. I think the most I’ve seen this run is about $200, and whatever is left over often takes about a month for you to get a check back. I can’t make any guarantees here as to the timeline – you’ll need to talk to your power and water providers about that.
6. Closing fees, wiring fees for funds, etc etc.: The title company charges a fee to conduct the closing – that’s usually around $250 to $300 and the buyer and seller usually split the cost. Your bank might charge you a fee to wire funds to or from the closing by the way so you’ll need to ask them how much that might be.
It’s been my experience that these 6 are the most costly steps and/or the ones that a lot of sellers are surprised by. I’ve had sellers who walked out of closing with $100,000 in their pocket but were alarmed by the fact the water company kept a $75 charge in escrow. So I don’t want my sellers to learn about these expenses while they’re sitting at the closing table. (Although I have had sellers who were convinced I was wrong about the property taxes…and guess what, I’m not!)
The more educated you are, the happier we all are! Gone are the days where the real estate agent controlled everything and had exclusive access to all the information. I don’t want to get paid for that. I want to get paid because you genuinely find my services helpful and because I’m a true asset to you!
If you like that way that sounds, and you’re thinking about selling your home don’t hesitate to reach out to me with any questions by clicking here. You can click here too, to learn more about me and why you want me to help you. I’d love to work with you and get your house sold!