When people are looking to make a move, they often wonder how much are closing costs when selling a house in Texas. And, this is an important consideration when you are buying a home as well if you are thinking you might be moving within the next few years. Many of the closing costs are shared between the buyers and the sellers of a house, however many of the costs are not. The typical total of all closing costs for a seller is approximately 8% to 10% of the negotiated sales price of the home. These costs include the REALTOR® commission, escrow fees, title policy, document preparation fees, and filing fees. Your REALTOR® should provide you with an estimated net sheet at the time of your listing which will break out each of these fees by line item indicating what your expected net will be after all fees and expenses.
How does Escrow Work when Selling a Home?
When an offer is made on your home, the buyer normally submits an earnest money check which is similar to a deposit indicating they are sincere or earnest in their offer to purchase your home. This money is then given to the title company with the negotiated terms of the contract and after all parties have agreed to the final changes and the contract is executed. The earnest money is then held in an escrow account at the title company. Mike McGlaun with Stewart Title of Wichita Falls explains what escrow means in this video.
Do Home Sellers Pay Closing Costs?
In the state of Texas, both home buyers and home sellers pay closing costs. Some of the costs are shared between the two parties, others are not. Typically in Texas when a home sells, the seller pays the REALTOR® commission, the property taxes from January 1 through the date of closing, a title policy for the buyer, a survey, half of the escrow fees, and half of the document preparation fees, as well as, filing fees, overnight mail and a few other smaller fees as applicable. The buyers costs include lender origination fees, a title policy covering the lender’s interest, their half of the document preparation and escrow fees.
What is the Average Closing Cost for the Seller?
When you are considering making a move and select a price at which to list your home, closing costs when selling a house in Texas are a big factor in that decision. As a going-in estimate to give you an idea of what your final net will be, a rule of thumb is approximately 8% – 10% of the negotiated contract price of the home. This 8% to 10% includes the most common closing costs and fees paid by the seller. This includes the property taxes from January 1 to the date of closing, the title policy and the REALTOR® commission, which are the three largest components. There are also document preparation fees to pay the lawyers for drafting the documents, escrow fees and fees the county charges for filing the deed of trust. If you have an existing survey, and it is accepted by the buyer’s lender, then there could be some savings there. This does not include seller concessions which might be negotiated in the contract for items such as providing a home warranty or paying some of the buyer’s closing costs.
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How Much does it Cost to Sell Your Home?
There are costs associated with selling a house which include the REALTOR® commission, settlement fees, title policy, pro-rated property taxes, filing fees and a few others. Both the buyer and the seller of a house have closing costs. Some of these costs are shared and some are paid completely by one side or the other. Of course, it is often said, everything in real estate is negotiable, so be sure to speak with your real estate agent who should be able to provide you an estimated net sheet breaking down each of these line items to show you how they affect your bottom line. Some of these items are a percentage of the sales price and some are flat fees. If you’re looking to get a rough estimate prior to meeting with an agent, about 8% to 10% of the expected sales price will get you in the neighborhood. As a home seller, your net will be after the title company disburses all the funds to pay off any existing mortgages and pay the closing costs and commissions. Something a lot of sellers don’t realize is that the balance on the monthly statement from your lender is not necessarily the payoff amount. Depending on when you make your payment and the calculation of daily interest from the last payment to the closing date, this amount will vary. The best thing to do is call your lender and find out what the estimated payoff will be two to three months from now to give you a better idea of how this changes over time.
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What are the Escrow Fees when Selling a House?
Escrow fees are the fees the title company charges for servicing the transaction from contract to close, to hold the earnest money in escrow and prepare the documents. These fees are normally split 50/50 between the buyer and the seller. The title company deposits the earnest money check into their escrow account and holds that money on behalf of the buyer and seller until closing at which time all the funds are dispersed. The title company will then research the history of the title of the property all the way back to the original land grant and ensure there are no other leans against the property that could hinder a clean title to be passed on to the buyer. At closing, once the buyer’s loan is funded, meaning the lender releases the borrowed amount to the title company, then the title company disburses all the funds. They will pay off any existing loans from the seller, and will pay the closing fees to the appropriate individuals per the terms of the contract.
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