[widget id=”youtube_responsive-3″]How much does it cost to sell a house, besides agent commissions? Ever wonder how they calculate title fees, escrow fees, and other home seller closing costs?
The cost to sell a house depends on a number of factors, including the final sales price, the type of property, and the terms of the purchase agreement.
It’s impossible to know exactly how much you will need to pay ahead of time. The final closing costs aren’t calculated until after close of escrow. Once everyone is paid, you receive a check from the escrow company for your Seller Net Proceeds. You can use my Seller Net Proceeds Worksheet to estimate your bottom line.
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Cost to Sell a House
Here’s a list of typical charges, to give you a general idea of the total cost to sell a house in San Diego County. I have also included an example at the end, for someone selling a house for $550,000.
Seller closing costs may include lender payoff fees, property taxes, HOA dues, HOA document and transfer fees, escrow fees, title fees, transfer taxes, broker commissions, and more. You can use my Seller Net Proceeds Worksheet to estimate your costs.
Lender Payoff
If you have a mortgage when you sell a house, your lender will collect the principal balance, any unpaid interest, and also charge some fees to close the account.
- Principal Balance
- Interest – any accrued interest, through close of escrow date
- Demand Fee – cost to provide a payoff amount to the escrow company. Also called a Statement Fee.
- Reconveyance Fee – cost to close the loan and to release the lender’s interest in the property, and reassign ownership (albeit briefly) back to the seller. Also called a Release Fee.
- Reconveyance Recording Fee – cost to record the Deed of Reconveyance at the County Recorder’s Office. The Deed of Reconveyance transfers the property title from the lender (also called the beneficiary) to the borrower (also called the trustor).
- Any Unpaid Late Fees
Property Taxes
Depending on the time of year of the sale, there may be unpaid property taxes, which are pro-rated until close of escrow. If property taxes have already been paid in advance, the buyer will credit the seller a pro-rated amount from the date of sale. You can also read my article about Property Tax Calculation for more information about how property tax is calculated when you sell real estate.
HOA Dues
Homeowner Association (HOA) dues are also pro rated. If they have been paid in advance, the buyer will credit the seller a pro rated amount from the date of sale.
HOA Fees
The HOA charges document preparation and transfer fees, which are usually paid by the seller. The seller is required to provide HOA documents for the buyer’s review, including the CC&Rs (Conditions, Covenants, and Restrictions), board meeting minutes, and articles of incorporation. The HOA charges a document preparation fee to assemble this package. The HOA also charges a transfer fee to register the buyer as the new owner. You can read my article about Seller Disclosures for more details about required HOA documents.
Escrow Fees
The escrow company handles all the funds in a real estate transaction. In Southern California, buyers and sellers usually pay their own escrow fees. The fee for each party is based on the purchase price, which is approximately $2 per $1,000 purchase price, plus a $200 base fee. Additional fees include courier, document preparation, and other services provided over the course of the escrow.
Title Fees
The title company provides title insurance to both the buyer and the lender. The seller usually pays for the buyer’s Owner’s Title Policy, while the buyer pays for the Lender’s Title Policy. Title insurance protects a policyholder against challenges to rightful ownership of real property, which arise from circumstances of past ownerships. The Owner’s Title Policy premium, which is paid only once, is based on the purchase price. Other title charges include sub escrow and wire fees, if the seller has an existing mortgage.
Documentary Transfer Tax
In California, the seller pays the Documentary and Property Transfer Tax, which is usually $1.10 per $1,000 of purchase price. Some cities have higher rates. This tax is split between the County and the City.
Broker Commissions
Broker commissions are divided between the listing agent’s and buyer agent’s brokers. The commission is negotiated between the seller and the listing agent, and is almost always a percentage of the purchase price.
Additional Charges
The Residential Purchase Agreement outlines the terms of the sale. Terms can include a seller credit towards buyer closing costs, or a buyer credit towards seller closing costs. Buyers often request a one-year home warranty, a natural hazard disclosure report, and a termite inspection. Buyers may also request that the seller complete repairs, such as fixing a plumbing leak, replacing a roof, or clearing a termite infestation and repairing termite damage. Repair requests are negotiated between the buyer and seller after inspections are completed.
Seller Closing Costs: Example
Here is an example of seller closing costs for a $550,000 sale, closing on July 15th. This seller has a mortgage with a principal balance of $350,000.
Lender Payoff Fees: $872
- Interest from July 1 – July 15: $719
- Demand Fee: $90
- Reconveyance Fee: $45
- Reconveyance Recording Fee: $18
Property Taxes: $190
- Prorated from July 1 – July 15: $190
HOA Dues: $49
- Prorated from July 1 – July 15: $49
HOA Fees: $390
- Document Preparation Fee: $300
- Transfer Fee: $90
Escrow Fees: $1350
- Escrow Fee: $1200
- Document Preparation Fee: $50
- E-Mail Document Fee: $75
- Overnight Fees: $25
Title Fees: $1850
- Owners Title Policy: $1650
- Wire Fees: $50
- Sub-Escrow Fee: $150
Documentary Transfer Tax: $605
Broker Commissions: $27,500
Other Charges: $1083
- Home Warranty for Buyer: $375
- Termite Inspection and Repairs: $600
- Natural Hazard Report fee: $108
Total Closing Costs: $33,889
Seller Net Proceeds: $166,111
($550,000 sales price – $350,000 mortgage principal balance – $33,889 closing costs)
The Bottom Line
The cost to sell a house will affect your bottom line. When you plan to sell your home, your listing agent can estimate your closing costs and seller net proceeds. The cost to sell a house depends on many factors, so it’s helpful to receive a personalized estimate. Fill out the form below with your property address, or call/text me directly at (760) 637-7231 and I will send you a no-obligation personalized estimate within 24 hours.
For a full list of the seller services I offer, refer to my home seller services page. You can also read about how I prepare your home to be listed in the MLS.
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