Q: If I sell my house in Burholme for $150,000, then how much will I have to pay in closing costs? The quote I got from the abstract company was really high. I am not using a broker to do it to save myself some money, but I feel like I am getting ripped off somewhere. I am making nothing from this sale.
A: Closing costs for sellers are not going to vary greatly. The abstract company could have quoted you what seemed like a high number to you for any number of reasons. The numbers are very straightforward. The number that varies in many sales would be any pre-negotiated fee for service to a real estate professional.
Keep in mind that you will be getting reimbursed any taxes that you paid from the time of settlement to the end of the year. That amount, whatever it would be, you can subtract that from the closing costs you will need to pay. Otherwise, plan on shelling out money the following:
- The Real Estate Transfer Tax in Philadelphia is 4 percent of the sales price. That is split 2 percent each to the buyer and seller. It is a large sum equaling $3,000 each party for a $150,000 home in the City of Philadelphia.
- The certification you will need from License & Inspection from the City of Philadelphia is $103.00. But that is just the cost of the certificate. If you have any violations, you will need to have the money to pay those fines as well. The L & I Certificate will need to be clean.
- Any liens on the property, besides the mortgage(s), will need to be paid.
- Whatever amount of money you will need to pay off your mortgage(s) is another cost. If you are not making any money on this sale I will assume it is because you still owe quite a bit on your mortgage(s).
- You will pay for all shipping charges and wiring fees associated with paying off your mortgage loan(s).
- There may be outstanding gas, electric or water bill balances owed that you will need to pay at closing. Depending on the time of the month and when you paid your last bill, that could add up.
- Some sellers elect to provide a One-year Buyer Protection Warranty for peace of mind and that could cost up to $450.00.
- Many sellers will opt hire a real estate professional and have prearranged the terms of payment for service, which is another cost associated with closing.
- There will probably be a flat fee to abstract company for doing this work for you.
- There will definitely also be a notary fee to keep it all quite legal.
Ask the abstract company to itemize your estimate and if there is anything on there you don’t understand, just ask. I am sure they would be more than happy to provide you with an explanation.
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.