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. Judgments found in the title search and back child support may also be an issue and required to be paid at the closing if owed by the Seller.
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. Due to some recent legal issues regarding the paying by the seller of the buyer's agent commission, your YRL agent will discuss with you exactly what this means and make sure you understand that the buyers commission even if our brokerage offers to pay a percentage to the buyer's agent may be addressed once we receive an offer should the buyer's agent wish to negotiate that amount being offered.
Commission to Agents: Commissions are absolutely negotiable but our office knows that our charge is most likely less than many other brokerages. At the present time, when you list your home, your YRL agent will discuss how our commission typically works and has worked in Indiana for about 60 years. However, very recently the Department of Justice has pursued lawsuits on brokerages regarding the payment of buyer agents included in the total commission and offered by the listing brokerage to the brokerage/agent that brings the buyer and represents the buyer. A seller today may actually have presented to them as a further condition or in an addendum to the purchase agreement a desire by the buyers brokerage to change the commission initially offered by YRL in the multiple listing service to the buyer agent OR the buyer may have agreed to pay the buyer agent and will ask that the commission being offered by your listing contract to the buyer agent be taken off the sales price. Just be aware that the commission as of 2023-2024 in our typical listing agreement says we charge X dollars and will represent the seller in an Exclusive Right to Sell Listing Contract and offer X percentage to the buyers agent. The YRL agent will explain this to you in depth.
HOA Fees: If there is an HOA then your seller dues will probably be pro-rated at the closing (done and shown on the closing statement) but if there is a fee for the HOA to transfer the ownership info required by the HOA there may be a fee usually $200-300 to do this for the closing. Usually the closing document will show this fee as paid by seller upfront if that is required and reimburse 1/2 of the fee to the seller from buyer
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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Janet Giles, our Broker/Owner has even published a book on “moving” – it is a complete guide and even the most experienced mover will still find great advice! We guarantee you that nothing has been left out! You can purchase the eBook at Amazon.com for Kindle or at Barnes & Noble for the Nook. BUT if you complete the form below and send us your name and email info, we will send you a copy for FREE! Just add as a comment in the Contact Form that you would like a free copy of the eBook and in what format.
We also have guides via email for both buyers and sellers to help you understand all you might need to know in the home buying and selling process.
