When selling a property, it’s important to understand the various costs associated with the
transaction. One of the most relevant aspects is the “seller’s closing costs.” These costs are the
expenses that the property seller must pay upon concluding the sale of the home. Here are
some of the most common seller’s closing costs you should be aware of.
1. Real Estate Agent Commissions: One of the largest expense items for the seller is the real
estate agent commissions. These commissions typically represent a percentage of the home’s
sale price and are split between the seller’s agent and the buyer’s agent. The fee can vary
depending on the location and market but generally ranges between 5% and 6% of the total
sale price.
2. Capital Gains Taxes: If you have made a profit on the sale of your property, you may have to
pay capital gains taxes. However, it is important to note that many countries offer tax
exemptions for the sale of a primary residence if certain requirements are met. Consult a tax
professional for specific guidance on your situation.
3. Mortgage Payoff Costs: If you have an outstanding mortgage on the property you are
selling, you may have to pay certain mortgage payoff costs, such as legal fees or a prepayment
penalty. Be sure to understand the terms of your mortgage and consult your lender about the
costs associated with early payoff.
4. Property Taxes Due: It is common for sellers to have to pay any property taxes that are due
at the time of the sale. These taxes are usually prorated between the buyer and seller, and the
amount you owe will depend on the closing date and local tax policy.
5. Legal and Closing Fees: Sellers must also pay legal and closing fees associated with the
transaction. This includes the cost of hiring an attorney or a closing agent to conduct the
property transfer.
6. Agreed-Upon Repairs and Improvements: If you have agreed to make certain repairs or
improvements as part of the sale negotiation, you will need to cover the costs of these tasks
before the closing date.
7. Real Estate Broker Commissions: In some cases, if you used a real estate broker to find a
buyer, you may have to pay a commission for their services. These commissions can vary
depending on the agreement you have with the broker.
It is important to remember that the seller’s closing costs can vary depending on the location
and specific circumstances of the sale. Before selling your property, it is crucial to discuss these
costs with your real estate agent and obtain a detailed estimate of the expenses you will face.
This information will help you plan properly and ensure you are ready to conclude the sale
successfully.
