Buyers Aren't The Only Ones With Closing Costs
As most people are aware, there is a lot that goes into buying a home. In addition to the cost of the home, buyers can expect to pay several thousands of dollars in closing costs. These closing costs cover a variety of expenses, including items such as the home inspection, appraisal, loan origination fees, title insurance, etc.
Who Pays For The Closing Costs?
When people talk about "closing costs," they are generally referring to the extraneous costs the buyers will be expected to cover. Buyers aren't the only ones with closing costs, however; sellers also have a set of expenses they will be required to cover in order to complete the transaction. This week, Arrowhead Title, Inc. is here to shed some light on the other side of the transaction.
If you are considering selling your home in the near future, here is a look at some of the costs you may be required to cover during the transaction process.
Your Outstanding Mortgage
If you have not paid off the mortgage loan on your home, satisfying this debt will likely be your largest expense. Repaying the mortgage loan should be your first priority - it must be satisfied before you devote funds towards anything else. It is worth noting that the amount of money required to pay off your mortgage loan may be higher than the remaining principal balance (to account for prorated interest).
Your Home Equity Loan (If Applicable)
If you took out a second mortgage or other line of credit on your home at any point, this must be repaid as you sell your home. Be aware that this debt is separate from your primary mortgage loan; both debts will need to be repaid when you sell your property.
Existing Liens
If there is a lien against your title, it means there is an outstanding debt that has yet to be repaid. This lien must be satisfied before your title can be transferred to a new owner.
Real Estate Agents' Commissions
Paying the real estate agents involved in a transaction is solely the sellers' responsibility. Buyers are not required to contribute to this expense, even though one of the agents represents them. The commission rate for real estate agents varies, but in the local area, it typically hovers at around 7% of the home's sale price. The 7% is split equally between both the sellers' agent and the buyers' agent.
Buyers' Perks
No matter what your reasons for selling are, you probably don't want to wait around for years hoping that someone will finally come along and want to buy your property. Your real estate agent will help you market your home, but you can also contribute to the process by adding extra incentives to entice buyers to your property. These perks may include:
Who Pays For The Closing Costs?
When people talk about "closing costs," they are generally referring to the extraneous costs the buyers will be expected to cover. Buyers aren't the only ones with closing costs, however; sellers also have a set of expenses they will be required to cover in order to complete the transaction. This week, Arrowhead Title, Inc. is here to shed some light on the other side of the transaction.
If you are considering selling your home in the near future, here is a look at some of the costs you may be required to cover during the transaction process.
Your Outstanding Mortgage
If you have not paid off the mortgage loan on your home, satisfying this debt will likely be your largest expense. Repaying the mortgage loan should be your first priority - it must be satisfied before you devote funds towards anything else. It is worth noting that the amount of money required to pay off your mortgage loan may be higher than the remaining principal balance (to account for prorated interest).
Your Home Equity Loan (If Applicable)
If you took out a second mortgage or other line of credit on your home at any point, this must be repaid as you sell your home. Be aware that this debt is separate from your primary mortgage loan; both debts will need to be repaid when you sell your property.
Existing Liens
If there is a lien against your title, it means there is an outstanding debt that has yet to be repaid. This lien must be satisfied before your title can be transferred to a new owner.
Real Estate Agents' Commissions
Paying the real estate agents involved in a transaction is solely the sellers' responsibility. Buyers are not required to contribute to this expense, even though one of the agents represents them. The commission rate for real estate agents varies, but in the local area, it typically hovers at around 7% of the home's sale price. The 7% is split equally between both the sellers' agent and the buyers' agent.
Buyers' Perks
No matter what your reasons for selling are, you probably don't want to wait around for years hoping that someone will finally come along and want to buy your property. Your real estate agent will help you market your home, but you can also contribute to the process by adding extra incentives to entice buyers to your property. These perks may include:
- Covering the buyers' owner title policy
- Purchasing a one-year home warranty
- Contributing to the closing costs
Other Costs
Depending on your specific situation, you may be required to cover some additional expenses as well. These other costs may include:
- Fees to pay off the loan (such as lender fees and courier fees)
- Unpaid or prorated property taxes
- Unpaid or prorated homeowners association fees
- Attorney fees
- Transfer taxes
- Recording fees
Where Do You Get The Money?
If you have enough equity built up in your home, covering these expenses is relatively easy. In these situations, you can simply use funds from the sale price to cover your various expenses. Once all your financial obligations have been met, you can pocket the remaining balance from your sale.
If you do not have sufficient equity in your home, you may be required to bring some money to the table to cover everything.
Trust Arrowhead Title, Inc. To Facilitate Your Transaction!
If you are buying or selling property at the Lake of the Ozarks, we hope you'll consider Arrowhead Title, Inc. as your title agency in Lake Ozark MO. We have facilitated thousands of transactions over the years, and we would be honored to help you reach a successful closing. For more information about how we can be of service to you, visit our website or call us at 573-302-1950. We look forward to talking with you!
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
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