When you sell your property in Texas there are costs associated with the sale of the property. I always provide a free estimated Seller’s Closing Cost Net Sheet.
Documentation Preparation Fee for transferring the deed
- Escrow Fees – your escrow officer is the key to a smooth transaction. Typically this fee is split between the buyer and seller.
- Title Policy – This fee is set by the state and guarantees that the buyer will receive clear title upon closing. As a seller you typically pay for the Owner’s Coverage, the rate is determined by the sale price. There is a second charge, typically asked for by the buyers, Area and Boundary coverage. This is additional title insurance that covers the buyer in the case of fences, buildings, etc. that are encroaching. Cost is minimal and can be negotiated.
- Notary Fees – usually runs about $10 to $25 or more depending on the document that needs to be notarized, some title companies include this charge in their escrow fee.
- Loan Fees – If the buyer is using a VA loan they are not allowed to pay for the pest inspection. You may be asked to pay for it.
- Buyer may ask the seller to pay for other closing costs in the purchase contract. Up to 3% of the purchase price for closing costs can be paid by the seller, this amount can be negotiated.
- Demand Fee – the bank that has your current loan may charge a fee for documents so your loan can be paid off through the sale in escrow.
- Deed Preparation Fee
- Restrictions Encroachments Minerals Endorsement
- Tax Certificate
- TX Policy Guarantee Fee – $2.00 charged by the state
- Recording and Transfer Charges
- Real Estate Commissions –
a good agent can help you get the highest price that the market will bear for your home. But don’t expect full service if you want to pay them a discount. Typical fee is 6% split between the buyer’s agent and your agent.
Costs Associated with the Property
- Natural Hazard Disclosure Report discloses to the buyer if the property is in an earthquake zone, fire hazard, etc. You as the seller need to disclosure this to the buyer. This is also known as a CLUE report and is generally provided by an insurance company at no charge.
- Tax Prorations, bonds or special assessments– Since real estate taxes are paid in arrears, you are responsible to give the buyer a credit for the time that you were in the home for the year it sells.
- Document Transfer Tax – City or County Fees that may be charged for transferring the property from you to the new owner.
- Any unpaid homeowner’s association dues (if a condo, town home or your property is in a planned unit development). Again, these fees are generally paid at year end so you will be responsible to give the buyer a credit for the time you were in the home for the year it sells.
- Home Warranty Plans – after you have moved out, the home warranty company’s policy will cover service problems – offering you additional after-sale liability protection.
At the end of the sale, you receive a closing statement that itemizes all of the expenses.