Seller Closing Costs

While planning to sell your home, it is important to understand the costs involved in selling your home so that you can accurately calculate your net proceeds.  It is not the sales price that is important, it is what you are going to walk away with.  Whether you are cashing out for retirement, or looking to upgrade or downsize, your net profit is a big "What if??" that needs to be figured out before you list your home.  When you take the purchase price, less your existing mortgage payoff, less the closing costs below, you should ahve a very good estimate of what you will be walking away with.

Please keep in mind that these are just general estimates and each transaction should be treated individually.  Please coordinate with your title company and attorney to confirm exact figures.

Brokerage Commissions - 5%-6% of purchase price (Ex. 350,000 Sales Price at 6% = $21,000)

Brokerage commissions are the largest part of a sellers combined closing costs, similar to the downpayment and mortgage fees being the largest part of a buyers closing costs.  This Commission is paid by the seller  is split between the Buyer's Brokerage and the Seller's Brokerage.  This is then split between each brokerage and the agent who represented each side. 

Attorney Fee- $1,000-$1,500

It is not required in the state of New Jersey to use a real estate attorney, but it is highly reccommended.  They will aid in the negotiation of home inspection issues, coordinate the title and closing, and protect your interests during the process.  I suggest using a local attorney in the area of which you are buying as there are many local factors and professional protocol that go into a real estate transaction that do not apply in other areas.

State Transfer Tax - Approx .5% - 1% of the purchase price

This tax depends on the sales price of the home.  Some people may use an estimate of about 1% of the sales price but the break down is as follows:

Homes not in excess of $350,000

$2.90/$500  for the first $150,000 

$3.35/$500 in excess of $150,000 but not in excess of $200,000 

$3.90 / $500 in excess of $200,000 buit not in excess of 350,000 

Homes in excess of $350,000

$2.90/$500 up to $150,000

$4.25/$500 in excess of 150,000 but not in excess of $200,000

$4.80/$500 in excess of $200,000 but not in excess of $550,000

$5.30/$500 in excess of $550,000 but not in excess of $850,000

$5.80/$500 in excess of $850,000 but not in excess of $1,000,000

$6.05/$500 in excess of $1,000,000

Click here for more information direct from the NJ Department of Treasury

Certificate of Occupancy / Fire Cert. / Letter of No Interest - $40-$200 (Not including repairs)

Depending on your location, your township will eaither require a Certificate of Occupancy Inspection or require a Letter of No Interest and possibly a State Issued Fire Certificate.  The point is so that the town can make sure that the condition of the property is safe for occupancy, confirm that there are no open permits or that no work was done without permits. Most of these involve a small application fee: $25-$60 depending on the town and either a mandatory or random inspection.  There are reinspection fees for failed inspections and this cost does not include any work that is required to be done prior to passing inspection.  (Ex. Missing smoke detectors, loose railings, tripping hazards etc.)

Prorated Utilities and Taxes - $???

The utilities, taxes, insurance and mortgage interest will be prorated perdiem based on your closing date, last payment and billing cycle.  This will fluxuate with every transaction and change on a daily basis.  If you currently have a mortage with an escrow account, some times the balance remaining in the escrow account will be returned to you after closing.

Seller Concessions - $???

There is a chance that during the price negotiation or the home inspection, you will be asked to provide a concession.  This could be to cover some or all of the closing costs for a buyer or if there were any unexpected home inspection issues that need to be resolved, you could be asked to cover some/all of that as well.  Keep in mind that this is all negotiable and not guarenteed to happen, but it is a very common occurance in the local real estate market.  I suggest padding at least $1,500-$2,000 just for planning purposes.

Miscellaneous - $250-$500

There are always miscelaneous fees and it is good to plan for them.  Depending on how you handle your closing, you may be responsible for recording fees, wire transfer fees, postage, delivery etc...