As a part of the closing process, all parties in the transaction used to receive a HUD-1 or Settlement Statement. This document showed all money exchanging hands to any party for both the buyer and the seller. Today, those forms have been divvied up into a buyer and seller closing disclosure. With each party receiving their own document, everyone can clearly see the charges they must pay and understand their bottom line.
What’s on the Seller Closing Disclosure?
The seller closing disclosure is similar to the buyer’s closing disclosure. It’s a summary and breakdown of all of the fees. It includes all fees paid, whether before the closing or at the closing. You will see each fee line-by-line, in an easy to read format so you understand what the sale costs.
A few of the fees the disclosure includes are:
- Agreed purchase price of the home
- Mortgage payoff
- Liens you must pay off
- The cost of any unpaid taxes
- The amount of any seller concessions you agreed to in the purchase contract
- The standard seller closing costs
The Fees Sellers Pay
It helps to know what fees sellers normally pay. Keep in mind, this will vary based on your location and the negotiations that occurred between the buyer and seller. In general, you can expect to pay the following:
- Real estate commissions – The seller is responsible for paying both sides of the real estate agent’s commission. This could range between 3% and 5% of the price of the home, depending on your negotiations. The agent will likely split the commission 50/50 with the buyer’s agent, but the seller pays the entire fee.
- Transfer tax – If your city or county requires a tax upon real estate transfer, it’s usually the seller’s obligation.
- Closing costs – As a part of the sales agreement, you may have promised to pay some of the buyer’s closing costs. The exact amount will depend on what you agreed on with the buyer. This will depend on the buyer’s ability to pay their own closing costs as well as their chosen loan program as some programs limit the amount of seller concessions.
Other Fees to Consider
Outside of the seller closing disclosure, there are other fees you may have to cover when selling a home. These include:
- Repairs – You may pay for repairs before you list the home or even after a contract is executed on the property. Certain loan programs, such as FHA, USDA, and VA loans require the home to be safe, sanitary, and sound. This means the appraiser must note any areas that aren’t working, which could mean repair costs for you. Even non-government-backed loans may require repairs be made, especially if the buyer won’t buy the home without the repairs.
- Capital gains tax – You may owe taxes on the sale of your home come tax time. If you made less than $250,000 profit or $500,000 if you are married filing jointly, you don’t have to worry about it. If you do make more than that, though, you will have to pay taxes on any profit above that amount.
- The cost of moving – Of course, moving costs money. Even if you do-it-yourself, you may still have to rent a truck and buy moving supplies. You can go the opposite extreme, hiring a company to not only move you, but even pack your belongings for you. The amount of stuff being moved and the distance you are moving will play a role in this cost.
The above items won’t be on the seller closing disclosure, but you should still consider them in the cost. Preparing yourself for what it will cost can prevent unpleasant surprises when the closing day comes.