Selling Your Home FSBO: Fees
To Get Paid, You Have To Pay
Buying your first home is a big milestone, and it can be exciting to finally have a place of one’s own. However, there are financial obligations that both buyers and sellers must consider before closing the deal. While it may seem like the buyer simply pays for the house and the seller receives payment for their property, this oversimplified view does not capture all of the complexities involved in real estate transactions.
In reality, things are much more complex. In order to buy or sell real estate, you must meet a number of legal requirements, conduct inspections, pay fees and purchase insurance policies. In most transactions, buyers and sellers share those costs in accordance with their agreement.
Listed below are the extra fees associated with the home buying process, as well as those that are usually the responsibility of each party.
Home warranties are paid for by who?
The purpose of a home warranty is to protect major systems, including plumbing and air conditioning, from damage. Generally, these policies cost $350 – $600 a year, excluding the deductible for each visit.
If the seller wants to sweeten the deal, he or she may include this expense. Home warranties are not included by sellers in hot markets, so the buyer has to decide if they want one.
Fees for real estate agents are paid by who?
A seller’s agent usually splits the real estate fee with the buyer’s agent in almost every home sale. In most cases, the fee is between 5 and 6% of the final sale price of the house.
Even if the seller does not use an agent, they can offer to pay the buyer’s agent a commission, usually between 2 and 3%. If you don’t earn a commission on the sale, it may be hard to find a buyer.
Land surveys are paid for by who?
An exact legal boundary of a property can be determined with a land survey. There are instances where a homeowner exceeds the legal dimensions of their property, despite it appearing obvious where their property line ends and begins. The result can be a complicated and costly legal problem.
For existing structures, land surveys are usually not required, except for new houses. Buyers generally pay between $200 and $1,000 for the service.
Cleaning fees are paid by who?
The house must be relatively clean when sold unless otherwise agreed between the buyer and seller. The process includes removing all belongings, disposing of trash, and cleaning up the area.
The decision to hire professional cleaners is up to the seller. Buyers are not responsible for recouping cleaning costs.
Depending on the condition of your home and its size, a deep clean can cost $200 – $400. There may be a difference in price between small and large cleaning companies.
Closing costs: who is responsible?
Closing costs are fees associated with purchasing a home that the buyer is responsible for paying. These fees can be extensive, and without proper preparation, they may come as a surprise. Generally speaking, closing costs refer to any fee or expense that must be paid in order to finalize the real estate transaction. This includes loan origination fees, appraisal fees and title insurance charges. Home buyers should also expect to pay inspection costs, escrow deposits and prorated taxes at closing.
Appraisals are paid by who?
Getting the value of your home and land appraised by a professional is the cost of the appraisal. A typical appraisal costs $300 to $650.
Any appraisals that are needed if the appraised value is lower than expected are paid for by the home buyer. The buyer must either pay the difference between the appraisal value and the sale price or negotiate with the seller for a lower asking price if the appraisal value is lower.
Home inspections are paid for by who?
The purpose of a home inspection is to determine whether the property has any major problems or repairs that need to be made. Inspecting a home costs between $200 and $500, and the buyer pays for it. Depending on whether radon, mold, or lead testing is requested, the price may be higher.
In addition, some buyers may wish to invest in a sewer scope, which will scan the pipes with a camera to find any potential problems. There is an extra charge of $250 – $500 for this, but it can save thousands if the pipes are severely clogged or degraded.
Who is responsible for paying for title insurance?
Legal costs associated with a title dispute are covered by title insurance. When a previous homeowner dies and leaves the house to an heir, they are legally entitled to live in it.
Homeowners and lenders have separate title policies. A home buyer usually pays .05% – 1% of the loan amount for both policies.
Escrow fees are paid by who?
To confirm their commitment to buying a home, a buyer makes an offer on a house and pays an earnest deposit. Until the sale is completed, this money is placed in an escrow account. The earnest money is transferred to the seller if the buyer rescinds the offer.
Escrow accounts cost between 1 and 2% of the sale price. This cost is usually split 50/50 between the buyer and seller.