St Louis Realtor - Seller Guide
When considering selling a home, the savvy homeowner must be aware of the costs associated with such a sale. While these costs can vary depending on the location of the home, many of the costs are universal.
First and foremost, if there is a mortgage lien on the home that hasn't been satisfied, the balance will be deducted from the proceeds of the sale. This also includes any second or additional mortgages. The lender will compute the actual balance due through the date of the sale and provide this information to the title company in advance.
Property taxes are also calculated through the date of sale and deducted from the proceeds. If there is an outstanding property tax bill, this too will be deducted from the seller's portion of the proceeds at closing. The property taxes must be current in order for the sale to be finalized.
If the seller obtains the services of a professional real estate agent, the commission which was negotiated will be paid to the broker at the time of closing.
A title insurance policy must be purchased by the seller ensuring that the home is being transferred to the new home buyer with a clear title. The cost of title insurance is based on the sale price of the home.
In some localities, utilities must be paid through the date of closing. For example, the water company may come out to take a final meter reading just before closing and notify the title company of the final water bill due and owing. This bill will be deducted from any proceeds the seller may net at the time of closing.
The seller will also be charged a governmental transfer tax which will vary by municipality.
Another governmental charge will be the cost of releasing the mortgage, if any. This fee is usually fairly minimal.
If there is a judgment against the seller, it's possible that any net proceeds from the sale of the home could be applied to said judgment. This would also include any mechanic's lien that have been placed against the property.
In some parts of the country, attorneys fees are also charged to the seller at closing if these fees have not been paid in advance.
An optional charge would be a home warranty offered to the home buyers. In most instances, this is paid for by the seller and is deducted from the proceeds. Offering this warranty may help sell a house faster.
It is in a seller's best interest to speak to a professional like an experienced home buyer or Realtor to obtain a more precise estimate of charges for their particular region. This will allow the seller to compute the difference between the potential sale price of their home, and the expenses that will be incurred, to accurately review their bottom line. Bear in mind, if the expenses exceed the purchase price, the seller will be required to bring funds to the closing table to cover those expenses. Therefore, it is imperative that a seller be aware of the true costs associated with selling their home.