Carlsbad Real Estate News and Views: What are Seller Closing Costs in Carlsbad?

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What are Seller Closing Costs in Carlsbad?

Carlsbad Sellers’ Closing Costs in a Real Estate Transaction

 

Homeowners who are planning to sell are naturally interested in what they can sell their homes for. It’s probably the number 1 question sellers want answered.

 

moneyHopefully you have hired a great Realtor to help you determine the value and get your home prepared for the market, then listed and sold.

 

But before you start counting those dollars, you do not want to forget about the closing costs that will impact your net proceeds. Remember when you bought the home and had to pay those closing costs?

 

While they differ, there are closing costs for sellers, too.

 

We will discuss these fees if we work together, but any respectable listing agent should provide you with some projected costs when you are getting started so you have an idea of the net proceeds. Keep in mind real estate transaction fees can vary depending on a whole host of factors, including what the contract says buyers and sellers will pay.

 

Seller HandbookThere are 2 substantial fees for most sellers – the commission (you ARE using a licensed professional, aren’t you, so you can maximize your sales price?) and the mortgage payoff; no doubt the payoff is the biggest expense so let’s cover that first.

 

Unless you are fortunate enough to not have a mortgage, the bulk of the money impacting what goes into your pocket after closing is the loan payoff. Your latest mortgage statement should provide the current loan balance.

 

Remember, however, the final payoff amount (e.g., principal, interest, other fees charged by the lender such as reconveyance and recording fees) will depend on the actual closing date.

 

If you have a second loan, say a home equity loan or line of credit, that must get paid off as well.

 

The other substantial fee is the commission, which is negotiable. You will agree on that fee with the listing agent and brokerage you hire, and it will be spelled out in your listing agreement.

 

Here are some other fees you may have, depending on the property and what’s been negotiated in your contract with the buyer. Keep in mind this is from my perspective here in Carlsbad CA – speak with your agent early on to obtain an estimate of what real estate fees to expect where you live. For example, you might not use an escrow company where you are located, and some states use attorneys.

 

Property taxes that are due and haven’t been paid (or a credit from the buyer for property taxes already paid beyond the closing date)

Escrow fee (seller portion)

Owner’s Title Insurance Policy (typically paid by seller per the contract)

Transfer Tax for San Diego County ($1.10 per $1000 of purchase price)

Natural Hazard Disclosure Report Fee

Home Warranty (buyers commonly request seller pay for 1 year)

HOA Document Preparation Fee (if there is an HOA – often paid in advance when escrow opens)

HOA Transfer Fee (if applicable)

 

dollarsThere may be other fees as well, including Courier Fees, Notary Fees (for the deed) and Document Recording fees (e.g., payoff of the loan).

 

While you should have an estimate upfront, the escrow company will provide a summary of the fees, any credits, and your net proceeds shortly before closing.

 

For more information on key things you should know when selling your home, check out my video series on my YouTube Channel, Home Selling Tips and Advice (21 short 1 to 2 minute video tips).

 

If I can assist you in any way with your home sale, please get in touch with me at (760) 840-1360 so we can discuss your needs, time frame, and a market and equity analysis, and create a strategy to sell your Carlsbad home, or one nearby, for top dollar and as quickly as possible in 2020.

 

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If I can provide more information about homes for sale in Carlsbad and in surrounding areas, local housing market conditions, or assist you, friends or family in a purchase or sale, please call or text me at (760) 840-1360, or email me at JeffDowlerSolutions@gmail.com

 

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Comment balloon 18 commentsJeff Dowler, CRS • January 16 2020 07:48PM

Comments

Jeff closing cost are something both Buyers and Sellers many times fail to consider.  When I am working with a Borrower I make sure they know what those costs are going to be as early as I possibly can in the process.  Being surprised by closing cost in the end or after they are well into a transaction is not the time to find out about them.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) 5 months ago

Thanks, George Souto !

Excellent points. I think closing costs are often not at the forefront of buyer and seller thinking, and they can be pretty substantial, as you know. It's important for them to know what these are early on in the process.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

Very informative overview of what to expect for closing costs.  Too many clients don't have strong agents to guide them on this front.  

And I see your video series on YouTube - very nice!!

Posted by Francine Viola, REALTOR®, In Tune with your Real Estate Needs (Coldwell Banker Evergreen Olympic Realty, Olympia WA) 5 months ago

Thank you Francine Viola 

Sometimes sellers are surprised at the costs, especially if selling for the first time, and they DO need guidance early on in the process.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

The alphabet spammer strikes again. Good grief, you'd think we could get rid of these creeps. 

I really like this explaination Jeff. We actually provide a net sheet in our CMA's showing several scenarios - a bit over value, suggested pricing, and a lower price point - generally about 10,000 apart. It is valuable, as it can show sellers the reality, plus it sets expectations. Naturally, it has a disclaimer noting we can't know the exact price the house will eventually sell for ---- once we get an offer, we always include a net sheet.  

In Washington state sellers also pay an excise tax - is it about 1.8% depending upon where you live. So, it can be a hefty part of the closing costs too. 

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) 5 months ago

This is a really good breakdown of the closing costs that a seller will have in your area.  I hope that your clients realize that they have hired the best when they hire you and treat you like you are the best.

Posted by Brian England, MBA, GRI, REALTOR® Real Estate in East Valley AZ (Arizona Focus Realty) 5 months ago

Good morning Jeff - Closing fees can be a surprise for people who have not planned.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 5 months ago

Thanks Debb Janes EcoBroker and Bernie Stea JD 

I use net sheets, too, when presenting my market data and when there is an offer.

I totally agree about the spammer - i've been hit badly in the last couple of days - several dozen spam comments on several posts! And they keep coming back!

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

This is a great post Jeff Dowler, CRS. When I was a brand new agent, I witnessed something in my office that stayed with me all these years. The listing agent(from my office) failed to disclose all of the closing costs for the seller, in that, he did not mention their portion of the taxes they would be paying at the time of the closing. When the seller received the closing document, they were beyond mad. Long story short, our Broker ended up absorbing the difference.
It is important for the agents to educate our clients on the closing costs so there are no surprises.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) 5 months ago

Thank you Brian England  It's essential information for sellers to have, even though it's an estimate. Once we have an offer, or they accept an offer the data become more real. "What's this going to cost me?" is an important question.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

Grant Schneider 

It's so true. And so often the costs are higher than expected. Our cients deserve to know even though early on it's an estimate.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

Hi Beth Atalay 

Wow, that is quite a story. Non-disclosure or partial disclosure can get us in trouble. I think having the information from escrow/title, at least that's where I get it in our state, and in writing is essential.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

There appear to be more closing costs for sellers in your market than in mine.  Sellers pay zilch in escrow, doc prep, and no seller title insurance fees either.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) 5 months ago

Hi Jeff Dowler, CRS - It is good to point these costs out to both the seller and the buyer.  A lot of the time it is sticker shock!

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Realty) 5 months ago

Hi Tammy Lankford, 

It's always interesting to see how different real estate is in other areas. Sometimes it's also monetary!

Enjoy your weekend!

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

That's definitely true Sheri Sperry - MCNE® 

It's often a surprise for new buyers, especially the amount. And sellers think about commission and the loan but often not the other items.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 5 months ago

Hello Jeff - let's face it, most home owners don't sell that often so the issue of closing costs they might incur may not be as familiar to them as other expenses so this your tips/advice is quite valuable as a guide for what they can expect.  Of course, situations can differ so your personal contact is an added benefit.   

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 5 months ago

Hi Michael Jacobs 

That's an excellent point and no doubt true for many sellers! Thnks for stopping by!

Have a wonderful weekend!

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 4 months ago

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