Brenda Kellen: How do I know what to expect?
August 4, 2008
HEd: What will it cost to sell my home?
Q. I am getting ready to sell my home but am not sure what costs I will need to pay.
A. It is imperative to determine your bottom line before listing your property. Using this worksheet will help you calculate an estimate of what your proceeds check will total after closing.
Estimated Net Proceeds
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Sales price minus total = Estimated Proceeds
Sales Price – this is the price you are planning to list your property at
Mortgage Balance – you can look on your monthly statement to determine what your current balance is or call your mortgage company. The balance will differ slightly from the payoff the title company will use. You can also request a payoff statement from your mortgage company to more closely figure this expense.
2nd Mortgage Balance – same research as mortgage balance.
Other financing – any additional liens on the property or seller concessions per the sales contract (ie. contribution by the seller of buyer’s loan closing costs or down payment.)
Prepayment Penalties – find out if your lender is going to charge a monetary penalty for paying off your mortgage.
Closing Fee – this is the charge the title company places on both buyer and seller to process the paperwork for the closing, coordinate with the lender for loan documents and disperse funds.
Brokerage Compensation – the real estate company will charge a specified amount to perform the duties of selling the property
Title Insurance – per the terms of the Colorado Real Estate Commission approved contract the seller provides, at seller’s expense, a title insurance policy in an amount equal to the purchase price. A seller may be eligible for a discounted re-issue rate if a title search has been done on the property within the last few years. (ie. refinancing or having bought within the last few years) You can call a title company and ask for a price of title policy based on the list price of your property.
Real Estate Taxes – In the state of Colorado, taxes are paid in arrears. The 2007 taxes were due this last spring and the 2008 taxes will be due spring of 2009. The seller will pay a pro-rated amount of taxes for the current year based on the amount of time the seller owned the property. **If you escrow for taxes, the amount remaining in your escrow account with your mortgage company will be refunded after closing.
Miscellaneous – Recording fees, FED Ex overnight charges, etc. After closing, the title company will overnight payment to your mortgage company to payoff your loan.
Estimated Expenses – Add together the above numbers to determine what dollar amount is necessary to cover the costs of selling.
Estimated proceeds – Subtract the estimated expenses from the sales price.
Once you have determined the estimated proceeds, you can easily position yourself for unemotional, informed negotiating by knowing what dollar amount is acceptable to you. Knowing this number up front eliminates frustration and confusion when you receive an offer.
For more insight into the current real estate market, please contact me directly at 970.485.1115, visit my website at http://www.gokremmling.com, or e-mail me at firstname.lastname@example.org. I have been selling with Omni Real Estate for over 10 years and help buyers and sellers in both Grand and Summit County.