The Stapleton real estate market is vibrant so some homeowners have decided now is the time to sell. But what are the costs associated with selling a Stapleton home that will lower how much you receive at closing?
Here’s the scoop on the 7 main costs, using a recent Stapleton Seller Settlement Statement as an example.
Before I get into reviewing the example settlement statement I should say that almost everything in real estate is negotiable and every situation is unique. Because it’s all negotiable, between you and your agent and you and your buyer, there is no one exact answer for how much it will cost to sell your home. The example below will give you a good sense of the ballpark costs and if you want an exact estimate of your home’s value and closing costs I’m happy to provide one!
As you read the post below it may help you to open up this recent Seller Settlement Statement. I’ve numbered the Settlement Statement items with large red numbers to correspond with the items below so you can easily follow along.
7 POTENTIAL COSTS OF SELLING A STAPLETON HOME: (listed from likely most expensive to least expensive:)
1- Real Estate Broker Fees:
Typical cost is a wide range. Low flat fee up to 6.0% of the sales price of the home.
Typically the seller pays for both their agent and the buyer’s agent, which is why this is the most expensive part of selling a home. Sellers need to know that real estate commissions are completely negotiable (there are no standard percentages or requirements) so they should talk to several Realtors and see who gives them the most value for their money. In our example, find the “1” in red and you’ll see the broker fees totaled $14,577 in this case. This figure is broken down on the left side between the other agent and I.
2 – Property Taxes:
Typical cost depends on time of year. Title company must make sure all property taxes year to date are paid.
Ok so property taxes aren’t a real expense but it feels like one the day of closing so I want to explain. The title company has to collect the year to date property taxes owed from the seller’s proceeds at the time of sale and make sure the county is paid. That way the new buyer is assured that all taxes are current on the home they are buying. However, the seller almost always has a mortgage lender that is escrowing, meaning setting aside, these taxes every month so in essence you already have the money for these taxes. Whatever is in these escrows will be sent back to you after closing by the lender once they receive your loan payoff. So it feels like an expense but you’ll get most of it back after closing. You’ll notice there are two red “2”s on the attached example, they just address the previous year’s tax and this year’s tax in two different line items but both are taxes.
3 – Seller Concessions:
Typical cost varies widely but I’d say $250 – $3,000 is the normal range in Stapleton.
Seller concessions means any concession the seller makes for the buyer, such as lowering the purchase price or giving the buyer closing cost funds at closing. Why would the seller do this in a “seller’s market”? Two reasons.
First, the buyer may need some closing costs money to make their financing work. They could be qualified for the loan fine but not have a lot of cash to pay for the closing costs. As long as you as a seller are happy with the “net price” (which means the price minus the closing cost concessions) then it’s fine. In this market if buyers need closing costs back I see them increase their offer so the net is still satisfactory to the seller.
Second, a seller might provide a concession when there are issues with the home that come up during inspections. As a way to keep the transaction moving forward a seller may offer the buyer a cash concession so the buyer can address the issues after closing. See item “3” on the attached example. In this case the buyer needed $3,000 to make their financing work then they found some issues at inspection so we gave them another $250 for those items so the total was $3,250.
4 – Owner’s Title Policy:
Typical cost is $1,000 – $2,000 but it depends as it’s based on the sales price of the home.
Typically the seller pays for the buyer’s title insurance policy. (Remember, it’s all negotiable but I rarely see the buyer pay for the owner’s title policy). This title policy, which is an insurance policy, protects the buyer from any title issues that may arise on the property. In our example the “4” shows you the Owner’s Title was $998 paid by the seller.
5 – Stapleton Community Fee:
Cost is equal to purchase price – $100,000 * .25%. Typically $600 – $1,750 for most homes in Stapleton.
This community fee goes to the Community Investment Fund which helps fund schools, parks, open space, job training and affordable housing in the neighborhood. It’s completely negotiable which is why by the “5” in our example you don’t see any amount – in this case the buyer paid it to make their offer more attractive! I usually see this paid by the seller.
6 – HOA Record Change Fee:
Cost can be $0 – $275.
The Stapleton Master HOA charges $275 as a record change fee. It’s negotiable as to who pays this fee, buyer or seller. In our example you’ll see by the “6” that the HOA record change fee of $275 was paid by the seller. The buyer already agreed to pay the full “Stapleton Community Fee” (see #5 above) so we didn’t want to argue over paying $275 for this fee.
7 – Miscellaneous Fees:
Typically $250 – $350.
There are always a few small fees and expenses such as the one I highlighted with the “7” in our example. Just budget a few hundred dollars for these items.
So those are 7 items that will likely affect the cash you walk away with at closing when selling a Stapleton home. But what about taxes you have to pay on the profits you make from the sale of your home? Well that varies depending on your tax situation and you should consult your tax professional to plan ahead. At the time I write this the rule is if you’ve lived in the home 2 of the last 5 years you don’t have to pay taxes on the gain but there are limits to the amount of tax free gain you can have so again, ask your tax pro and if you don’t have one I can refer you to one.
I hope this explanation of the 7 expenses of selling your Stapleton home helps! If you’d like help valuing your home and getting a more accurate estimate of what you could expect to walk away with I’m here to help.