Closing costs.
There are fees associated with the sale of your property. Fees will vary from transaction to transaction and will vary slightly depending on the title company used and their fee schedule – they are however pretty similar overall so you can get a pretty decent estimate prior to closing.
Your listing agent will supply you with a “good faith estimate”, which is a net sheet covering the costs to sell that will provide you with the expected proceeds from the sale.
Title Fees
The title company is the agent who will conduct the transaction on behalf of both parties. Generally the title company is chosen by the seller.
The seller can chose any title company they wish. It may be a good idea to ask your Realtor for a recommendation. Many Realtors work with the same title companies and can generally provide a better service if they have knowledge or a working relationship with a particular title company.
An average for the title work will come in around $700.
Miscellaneous closing fees such as the estoppel, recording fees, lien search are usually in the region of $700.
Pro-rations
You may have to “refund” the buyer any owed state or community fees.
For example if the property tax on your property is $4,000 a year and you close in the middle of the year you will have to pay the buyer your share of the taxes for the time you owed the property which would be in the region of $2,000. Conversely, if you have paid fees in advance such as HOA fees you will be reimbursed by the buyer.
Doc Stamps
Basically sales tax in real estate terms. Doc stamps is a calculation made from the selling price multiplied by the mil rate from the county.
Calculated at: .70/100 of sale price
Title Insurance
Seller pay for title insurance.
For those keeping score: $575 for first $100,000, then $5.00 per $1,000
Commissions.
Broker commissions may vary, discuss broker fees directly with your listing agent.
FIRPTA.
If you are a foreign national you will be subject to FIRPTA withholding of 15% of the proceeds.
This is not a fee and if you are tax compliant you should see a full return of the withholding.
You can read more about FIRPTA Here.
Mortgage.
If there is a mortgage on the property that will need to be paid off, make sure you order a pay off from the lender ASAP.
Summary.
As a quick reference you can calculate it is about 8% of the proceeds to sell your vacation home.
If you have any additional questions please contact us directly and we will be happy to answer any questions you may have.