What Are Average Closing Costs for Home for Cash Sale?
Before proceeding with selling your home for cash, make sure you are informed about all the information regarding this process. Something important to know is the closing costs. Costs are a little different in each state, in accordance with their laws and general costs, but it is generally not far off.
What Are Closing Costs?
Before answering further questions, you must know what closing costs are. According to Bank Rate, closing costs are the fees you pay when finalizing a housing transaction. These fees for a cash sale include earnest money deposit, title insurance, title search, escrow, appraisal fees, homeowner’s insurance, and property taxes. Paying the fees ensures everyone involved is being paid back.
Who Pays Closing Costs?
A contract must be made between the buyer and seller to guarantee the payments will be done in a certain way. In most cases, the buyer will pay the majority or all of the closing costs, but there are a few instances where the seller will have to pay some of it or a little more than average.
How Much Are Closing Costs For Sellers?
The closing costs are split based on each of the fees that go into the closing costs.
According to AZ Flat Fee, these are the costs associated with closing and how much..
Earnest Money Deposit
This is a payment to show you are true aboard in the purchase of a home. It serves as a down payment on the home.
Typically, the deposit is between 2 to 5 percent of the purchase price, so it varies on how valuable the homes are.
Title Insurance and Title Search
These go hand in hand. Title insurance is a payment that helps protect the purchaser from any financial issues or losses. A title search is used to verify the seller legally owns the property.
Typically, the title insurance fee is around $1,000. However, some require a title search as well and this cost varies from $75 to $200, depending on the state you live in and who does the search.
Escrow
This is a payment that goes to any companies that helped with the transaction such as a title company, escrow company, or real estate attorney then is distributed to third parties involved as well, if any.
Typically, it is about 1 to 2 percent of the home price, so again, this cost depends on the value of the home and is different for everyone.
Property Taxes
These are the taxes paid by an individual who owns a property.
Typically, the price gets transferred by the state and they put from 6 months up to 1 year’s worth of taxes on it. In saying this, the cost is up to the state and its tax laws, so it is different for everyone.
Appraisal Fees
This cost is to pay the appraiser for coming to look around the home and giving it a value. It helps make sure you are given a correct value that is not too high or too low to make things fair,
Typically, the fee ranges from $300 to $400.
Homeowner’s Insurance
This is normal in every sale. It is based on a few factors including deductibles, location of the home, coverage amounts, and size plus the value of the home all together on one bill. It is used to cover any damages or legal liabilities of the home.
These costs vary from $900 to $2,000 a year depending on all the factors above. During the closing process, you get charged the first year’s worth of homeowner’s insurance.
HOA Transfer
Some homes may require a fee to transfer ownership of the home.
Typically, the fee varies from $200 to $250, again, depending on the state or town.
Overall, most of these costs require further research or conversation with a professional as they vary from state to state.
American Family Insurance states, when selling a home, the closing costs are roughly 3 to 5 percent of the total price of the home. If the seller does have to contribute at all to the closing costs, iBuyer says they would pay around 8 to 10 percent of the total closing price and the buyer would cover the rest. However, in most cases, the buyer will cover the entire closing price.
Want More Information on Selling Your House For Cash And Closing Costs?
Go to House Guys! House Guys is an excellent house-for-cash company that can help avoid stress and answers all your questions relating to closing costs or even the process in general. You can make this happen with four easy steps:
- Fill out our form or call us about your property at 816-892-2132.
- We will contact you to set up an appointment if it meets our buying criteria.
- We will present you with a fair-priced, written, no-obligation offer.
- We will close at a local title company, and you will receive the cash in as few as seven days!
Visit us at our House Guys website to learn more.
We hope you have learned more about surviving the house-selling process and wish you luck!