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An Explanation of Costs You May Incur
When You Sell Your Home
Paying off your existing first
mortgage... The interest costs on your mortgage are adjusted
from the date of your last payment to the date of closing. Also,
check with your mortgage holder to determine if there is a
prepayment penalty for prepaying your mortgage.
Other financing outstanding on your
property... Home improvements loans, second mortgage, contracts
for deed, mechanic's liens, tax liens or judgments...all of these
may need to be paid at the time of closing.
Special assessments of record...
The seller usually pays these, but the buyer may be asked to pay
this cost or agree to assume it. If your home is sold with new
financing, you may be asked to pay the specials since most lenders
will not mortgage a home that has an assessment against it. (This
does not include annual special assessments for such things as
lighting, park board, garbage pickup, etc.)
Pending special assessment...
Provisions usually must be made for the payment of pending special
assessments at the time a new mortgage is written. Since the exact
cost of a pending special has not yet been established, lenders
require that either the buyer or seller deposit two times the
estimated amount into an escrow account returned to whoever paid
them. Closing such an escrow account sometimes takes as long as one
year.
State deed tax... This is
established by the selling price of the home, and the rate is $3.30
for each $1,000 of purchase price.
Balance of real estate taxes due at
closing... Check with your
lender to determine this figure if your taxes are escrowed.
Points... These are points that
need to be paid to a lender for the buyer to get new financing on
your home. These fees are negotiated at the time of making the
offer.
Buyer's closing costs... In some
instances, buyers ask sellers to pay all or part of their closing
costs for new financing (especially 1st time home buyers.) These
fees are in addition to the above-mentioned points.
Other costs... Other costs that
can be anticipated: Well water tests (if applicable), Septic
inspections (if applicable), Electrical service compliance
upgrading, work orders issued by the appraiser, and other repairs
that may be necessary as the result of a home inspection ordered by
the buyer.
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