Closing Costs

Seller closing costs are a fact of life, and you should plan for them. Don't think of them as inherently evil; rather, think of them as simply the costs of doing business, and you will find it much easier to remain objective about the process of selling your home.

Broker Fees - This is the big one, and there is often a misconception that your listing agent is making a 6% commission. This only happens when your listing agent also happens to be representing the buyer, which is very rare. In fact, it's frowned upon by many real estate commissions. In most cases, your listing agent has to pay the buyer's agent out of whatever commission they get from you. Most of the time, buyer's agents make 3%, so if 6% is in your listing agreement, half of it goes to the buyer's agent.

You can try to save money by selling your home yourself, but statistics show that you may end up costing yourself much more in terms of time and money by doing so, especially in a soft market.

The next big cost comes from providing a title policy. Title insurance premiums are regulated and won't vary from one company to another; however the other fees that are involved, such as title examination, escrow fees, courier fees, and document preparation cost will vary. There will also be fees for recording and paying off your existing loan. And don't forget about taxes. You'll need to pay your taxes up to the date you sell the house, and you may also have to pay transfer fees if you live in a neighborhood with a home owners association or a condo complex.

Seller closing costs can add up. But your title company should be able to help you estimate them early on.