Alison Brown's Blog
The process of closing on a home can seem lengthy and complex if it’s your first time buying or selling a house. There are several costs and fees required to close on a home, and while it’s up to the individuals to decide who covers what costs, there are some conventions to follow.
In this article, we’re going to talk about closing costs for selling a house and signing on a mortgage. We’ll discuss who pays what, and whether there is room for negotiation within the various fees and expenses.
But first, let’s talk a little bit about what closing costs are and what to expect when you start the process of buying or selling a home.
Closing costs, simplified
If you’re just now entering the real estate market, the good news is you can often estimate your closing costs based on the value of the property in question. You can ask your real estate agent relatively early on in the process for a ballpark figure of your costs.
Closing costs will vary depending on the circumstances of your sale and the area you live in. In some cases, closing costs can be bundled into your mortgage, such as in “No Closing Cost Mortgages.” However, avoiding having to deal with closing costs often comes at the expense of a slightly higher interest rate.
If you are planning to buy a house and have recently applied for a mortgage, laws require that your lender sends you an estimate of your closing costs within a few days of your application.
Now that we know how closing costs work, let’s take a look at who plays what.
Buyer closing costs
In terms of the sheer number of closing costs, buyers tend to have the most to deal with. Fortunately, your real estate agent will help you navigate these costs and simplify the process.
They can range from two to five percent of the cost of the sale price of the home. However, be sure to check with your lender for the closest estimate of your closing costs. It’s a good idea to shop around for mortgage lenders based on interest rates as well as closing costs charged by the lender.
Here are some of the costs you might be asked to pay as a home buyer:
Prepaid interest or discount points
Home inspection fee
Insurance and Escrow deposits
Seller Closing Costs
While the seller pays a larger amount of closing costs, sellers still have obligations at closing that can be just as expensive. The biggest expense for sellers is to pay the real estate commission. Commission usually falls in the vicinity of 6% of the sale price of the home. This covers the commission of both the seller’s and the buyer’s real estate agents.
The main takeaway? Buyers and sellers both share the burden of closing costs. While the buyer has more expenses to take care of, the seller pays for the largest costs.
After spending enough time researching real estate online, you probably think you can do just as good a job selling your home as a professional real estate agent. However, it's more difficult than it sounds. Even though you can access many of the same advertising venues as a professional, they have a wide network and breadth of experience that you can’t leverage when trying to DIY.
Experience and Know-How
Real estate agents are sales and advertising professionals. First, consider if your work experience and skill set falls in those same zones. Are you familiar with negotiating deals in the hundreds of thousands of dollars? Your real estate agent spends all day, every day working with other agents and negotiating deals in a variety of amounts. They know how to tell if the other party is willing to reduce or increase the amount, and what perks might push a deal through. They also know the best way to spend their advertising dollars to get interest in your property and often have standing arrangements with printing companies, an existing real estate website and membership in the local MLS board — all of which give them deals on advertising whereas you would be paying full retail price to print postcards or mailers and may not have access to things like MLS listings at all.
In addition to the actual sales process, real estate deals come with a ton of paperwork. Not only is this complex in any area, but it also varies from location to location and getting it wrong can cause the purchase or sale to fall through, or, worst of all, might cause you to incur high fines from your local governing bodies or the IRS. While you can look up the right process for your area, you may not be able to trust the information available online. It's not surprising that information listed by non-official sources may be incorrect or incomplete, but official government sources often take a while to get updated when rules or laws change. Your real estate agent, on the other hand, is required to be notified of any changes, and the MLS board they are a member of also keeps an ear to the ground and their agents informed.
Local Area Information
Real estate agents often have access to, and even pay extra for, information about the areas they work in. That means they know what properties sold for over an extended period of time, what features they have, and even how long they stayed on the market. A lot of this information is protected, and only licensed professionals have access. This makes them uniquely suited for pricing your home correctly for the market. If you price your home too high it may not sell at all, causing you frustration or costing you money. On the other hand, if you price it too low, you may get a quick sale, but you’ll miss out on the additional income you could have made.
Regardless, you may still think the agent’s commission is not worth the price. Most buyers and sellers agents make a percentage of the purchase or sale price of your home. This is great for sellers, since the higher the selling price, the more everyone makes. However, it can be a downside for buyers if they think the agent is trying to talk them into higher prices or different homes just to make a larger commission. Many agents are willing to negotiate on this point and often agree to a flat rate in the beginning, regardless of the purchase price, as long as you talk to them about it upfront. This removes the worry that they are trying to find the highest amount you’ll spend rather than the best deal in your market.
Before making the decision to DIY your real estate purchase or sale, talk to a real estate agent in person to get a full understanding of the services they can offer you and how much control you have over the costs. Most often, you will find it’s worth the comparatively small cost of the agent over the larger costs of self-advertising, lost sales price and time required to handle any interested parties. Talk to a professional today for the absolute best results.
4 Prentiss Place, Medfield, MA 02052
4 Prentiss Place, Medfield, MA 02052
Hurricanes produce high winds and heavy rains that can take a serious toll on your roof. Although you can take steps to prevent damage, you can still end up with missing shingles or other problems that leave your home unprotected from the elements. These are some of the more common types of roof damage that these powerful storms can cause.
Loose or Missing Shingles & Flashing
A hurricane’s winds can pull flashing and shingles off of your roof or loosen them. Shingles keep your home interior safe from water damage, while flashing protects areas around chimneys and dormers from leaks. Hail during hurricanes can also cause damage to shingles and flashing.
Ridge Vent Damage
If your home has ridge vents, these can sustain damage during a hurricane. These vents are typically placed right at a roof’s peak, making them easy targets for strong winds. If your roof has ridge vent damage, rain can get into your attic during a hurricane.
Loose or Damaged Gutters
The gutters on your home help move rain during hurricanes away from the exterior, which lowers the risk of water damage. Windy conditions can loosen gutters or even tear them away from your home, while hail or debris blowing around can cause severe dents or other damage. Clogged gutters can overflow during rainy conditions during a hurricane, putting your home at risk of serious water damage.
Vents & Fans
Roof vents and attic fans are normally sealed to stop water from seeping into your home. During a hurricane, damage to these parts of your roof can occur from high winds and hail. This allows rain water to get into your home during these storms.
After a hurricane hits, it's important to have your roof inspected for damage. This helps ensure that you have repairs done promptly to prevent serious damage.