WHAT COSTS ARE RELATED TO THE SALE:
Mortgage Pay Off: Before the closing, you will sign a release for the Title Company or Attorney to get the amount that will be owed at the day of closing. This will allow the Closing Company to prepare the closing documents and they will issue a check out of your proceeds at the closing to pay off your outstanding mortgage.
Lines of Credit or Equity lines: As with the mortgage pay off, you will have to authorize the closing company to get this information. If there is any amounts owed, they also will be paid off and any lines of credit closed.
Prepayment Penalty: Often, sellers think that all that is owed is the amount showing on their last statement. This is not always true. A prepayment penalty could be in your mortgage. You may also owe interest depending on the day of the month that you close.
Unpaid Taxes/Liens: This is why title work is important prior to closing to see if there are any liens or unpaid taxes on the title. These items will also have to be paid the day of closing. The closing company cuts these checks out of your proceeds and pays them on your behalf. In Indiana taxes are 'pro-rated' and as a seller the taxes you pay in May and November that current year are really for the previous year when YOU lived in the property. That is why Seller's typically pay the taxes to the date of closing Your YRL agent will explain pro-rated taxes to you.
Deed: The Seller is usually responsible for the Deed. If you are a typical Seller of your home, you will provide a Warranty Deed. The title company typically has the Deed prepared by an attorney that they hire to prepare all their documents.
Title Work: The Seller is responsible to pay for what is called the "Owner's Policy". It varies in price depending upon the sales price of the home. Your YRL agent can give you a close estimate of the cost of your title work. The Buyer pays for what is called the Lender's Policy unless it is a cash closing and then that policy does not exist.
Real Estate Commission: Your YRL agent will discuss your real estate commission. We have a minimum commission for the listing side of the transaction of $2000 no matter what the percentage is. There are two parts to the commission - the listing side and the buyer agent side. The Seller is typically responsible to pay both sides and the fee YRL charges is the total fee and we cooperate with the buyer's brokerage and whatever percentage we have agreed to pay them on the listing in the MLS.
Special Assessments: Special assessments are things like water, sewer, road or other local government improvements that were assessed to the property. In most cases they must be paid off, in others, they can be assumed by the buyer. If they are to be paid off, again the closing company will pay these out of your proceeds.
Optional Costs: The above are normal, expected costs paid by Seller but Buyers may request that a Seller pay for closing costs on behalf of the buyer, the closing FEE which is not a closing cost of buyer but is a cost that the title company charges to close the transaction and other arbitrary costs. The purchase agreements and/or counters will have these requested items in writing. Your YRL agent will go over all of the costs when a purchase agreement is received.
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