In this buyer’s market, many sellers find themselves lowering the price to the extent they can no longer do so. Yet, they soon realize potential buyers may still require more concessions at closing. This causes sellers to still lower the selling price beyond what they had reasonably expected in the worst scenarios. Let us analyze what reasonable costs mean and what they entail.
WHAT ARE SELLERS REQUIRED TO PAY AT CLOSING?
As a rule of thumb, you should expect to pay as the seller in closing costs about 1.5% of the purchase price PLUS 3% for broker’s fees, if you use a flat-rate broker or 6% if you use a full-service broker.
These are some usual costs INCURRED by Seller:
- Grantor’s Tax: This tax varies in every state, sometimes $1 of every $1,000 of fair market value calculated based on the higher of sales price or assessed value.
- Homeowner’s Association Fees
- Real Estate Taxes Due Prorated to the Closing Date
- Outstanding Utility, Water and Sewer Bills
SOME UNEXPECTED COSTS IN BUYER’S MARKET
Despite the Seller’s costs enumerated earlier, in this buyer’s market you may find buyers as part of their offers seek help with their own closing costs. In addition, if buyers do not like something in the house, they might ask for decorator’s allowance.
It is important to note, such requests are usually spelled out in the offer, and you as the seller are not required to accept them. Nonetheless, if you see others are doing it and the price is right, be ready to accept some reasonable accommodation.
STILL, SOME OTHER COSTS POSSIBLE
In addition, it is prudent to set aside a few thousand dollars if the inspection discloses something that you might have to incur.
Furthermore, it is prudent to purchase a one-year home warranty for several hundred dollars. In fact, if something breaks down such as the refrigerator or washer, the purchaser calls up the warranty company not you to fix it.