How To Reduce Your Closing Costs When Selling Your Home
Selling your home is always a big thing and once you’ve got your signature on the dotted line of a purchase contract, it’s just a matter of time before you’ll be receiving your payment and moving on. However, there is still the closing process to get through and the costs of this can really run up. This includes things like appraisal fees, title searches, credit reports, title insurance, commissions etc. There’s no way to completely avoid these but there are ways to reduce them.
To find out how you can reduce your closing costs, read on to see the best strategies.
- Negotiate A Reduction In Your Commission. Agent commissions typically run from 4% to 7%. For example, if you negotiated a 4% commission on a $100,000 the commission would amount to $4,000. If you had negotiated a 3% commission, you would only pay $3,000. Even a small reduction in the commission percentage can be beneficial, so don’t be afraid to go to multiple agents in search of a good rate.
- Split The Costs With The Buyer. Depending on the market, whether it’s one that favors buyers or sellers, you might be able to get some of the closing costs paid by the buyer. A market that favors sellers, will see buyers paying most of the closing fees and vice versa. If you’re not sure, then ask your real estate agent for clarification on who pays what. The most common closing costs include the following:
- Attorney’s Fees
- Transfer or Documentary Taxes
- Home Inspections
- Taxes or Assessments
- Title Insurance
- Recording Fee
In general, buyers pay more than sellers. However, if they can find something to negotiate on, they may be able to reduce some of the costs.
- Research Title Companies. A standard part of any home sale is the hiring of a title company. It’s their job to research the history of the property and find any restrictions or liens, to ensure the title is clear. What the fee will be, varies widely from one company to another. It helps so to do some research and get quotes from different companies, before choosing one.
- Reduce Your Hold Time. Costs involved with the hold time include things like property taxes, utilities, and insurance. If you’ve received multiple offers and need time to decide on one, your property will be listed as “Pending” status by the Agent. The less time you spend on this, the fewer costs you will incur. The more it drags on, the more fees you can expect to pay.
Selling a home sometimes isn’t easy and if done badly, you can see those closing costs cutting deeply into your take home money. Do your research and look for reductions in costs, where you can. Planned carefully, you can walk away with far much of a take, than you would have otherwise.