Now that you have accepted an offer, the closing date is right around the corner & the finish line is in sight. Based on how the offer was negotiated will determine your bottom line. It is not just the sales price you accepted, but it will also depend on what closing costs and fees you agreed to pay in closing the transaction that will determine the final outcome. This is where you begin to ask yourself …what is my bottom line?
If you are listing your home through our team of Reel Keeper Expert Advisors –you probably have already received what is called a ‘Estimated Sales Expense’ worksheet that lists out the costs associated to the sale which includes the bottom line -known as the Sellers NET Proceeds. Obviously, knowing what to expect at the closing can offer a piece of mind –so we make every attempt to deliver this to our customers along with each offer. This avoids any surprises on the day of closing.
Since the typical closing costs in a standard residential transaction for a seller will normally be higher than the buyer –it is important to have an idea of what a seller customarily pays when delivering marketable title to the property. Keep in mind that ALL closing costs are negotiable. Even though it is normal for certain parties to pay for certain items –it is entirely up to what is agreed to on the contract. Let’s review some of those closing costs…
Attorney Fees – In some states, it is required (by law) that each party be represented at the closing. In Florida, it is entirely up to you if you want to pay for representation. Obviously, if you are involved in a complicated transaction or one that involves an Estate you may choose to have an attorney represent you and review any and all documents before the closing.
Settlement and Closing Fee – It is very important that it is determined that the seller has the ability to convey ‘Clear and Marketable Title’. Therefore, the Title Company or attorney charges this fee for performing a Title Search and makes sure that everything is ready for closing. In addition, this fee normally covers the cost for them to perform the closing itself.
Document Preparation – This fee covers the cost to create and provide all necessary documentation including the HUD-1 (Uniform Settlement Statement) that will be required to perform the closing.
Documentary Stamps on the Deed – This is required and collected during the closing of all Real Estate transactions and gets paid directly to the Tax Collector.
Title Insurance – This insurance is a ‘must have’ whenever a home is sold and title is transferred. Regardless if it covers the basis of the loan or covers the homeowner for the cost of the homes purchase price, it will either ensure that the buyer and/or the mortgage company are covered in the event that a title flaw is found down the road.
Survey – This is a very important document that will define the boundaries of the property that identifies easements, structures, building restriction lines & right-of-ways. Sounds important, right. Every wonder why your neighbors fence was placed where it is? A survey will tell you and the mortgage company where your property ends and the next one begins.
Some other items like Recording Fee’s, Notary Fee’s, Courier & Wire fees are smaller fees that also come into play –but remain minimal in comparison to the above costs. As far as proration of Taxes, County Fee’s and/or Liens –these are not very negotiable as they get in the way of producing clear title so the seller is required to pay them.
As you can see, there is a lot that goes into what contributes to your Sellers NET Proceeds. If you have any questions about selling your home or how our team of Reel Keeper Expert Advisors can help -please feel free to contact our office.