You put your house under contract quickly, so now you’re ready to make your next move. Even if you sold your house for $350,000 and owe only $100,000 on it, you’re not going to walk from the deal with $250,000. That’s because of closing costs. Be prepared for these.
Home inspection issues
It’s highly likely that your buyer is going to want a home inspection. These issues usually turn on sound structure or health and safety. If there’s a significant issue involving any one of these, the buyer is going to either require repair or replacement, demand a reduced purchase price or walk away from the deal.
In all likelihood, your contract provides that you’re giving your buyer a warranty deed. If there’s a breach of any of the warranties contained in that deed, you’re going to be required to defend the buyer’s title. That’s what title insurance is for. It’s your warranty, so buying the insurance is your cost.
The title company or escrow agent is going to need a payoff letter from your lender with a per diem to date of closing. Be prepared to have a meeting of the minds with your lender as to what your exact payoff will be at what time of the day on what date. Remember the differences in time zones and how long it might take to Fed Ex the title company’s or escrow agent’s check over there too. If you’re short, you’re in breach of your warranty to convey clear title, and that situation could become very expensive.
It’s likely that you’ll have state and county transfer taxes to deduct from your net proceeds. For example, if you sell a property in Illinois for $300,000, there’s a minimum of $450 in transfer taxes due, depending on what county you live in. Illinois is only an example. There might even be municipal transfer taxes. Check with your state, county and municipality. Municipal transfer taxes are often the responsibility of the buyer.
Don’t forget your agent
The good news on this end is that any earnest money previously paid is taken off of the top of the real estate commission. Make sure that the real estate commission and any costs in connection with it are fully disclosed before closing. This is another meeting of the minds you want. An experienced and established real estate agent will be pleased to do this for you well ahead of closing.
An experienced agent is going to be thinking far ahead of you on your sale. You’ll be surprised how well they can estimate your net proceeds barring any home inspection issues. Think ahead like they do, and eliminate any problematic issues.