As an active, responsible home seller, you are probably anxious about how much profit you’ll make on the sale. You'll find that the amount of money you make selling your house is dependent on many things, including the amount you still owe on the home, realtor fees, and closing costs. If you have a second mortgage, home equity loan, or line of credit on the property you’ll have to settle when you sell the home. As you can imagine, few real estate closing are exactly alike, making it impossible to give an exact number percentage.
Although some closing costs are standard, others depend on the unique factors of the sale. If you sell your home, your profits depend entirely on what closing costs you’re responsible for, on top of any other fees that match your personal selling situation. It’s always safe to say that unexpected expenses will pop up, and you'll probably have more fees deducted from your proceeds than you initially expected.
If you don’t own your home, expect your mortgage company to take the most significant bite out of your sale proceeds. It’s impossible to sell your home without satisfying your mortgage at the time of closing. You might also have to pay a cancellation fee for finishing payments before the full term of the loan. This is one reason why pricing your home is essential. You want to generate enough profit from the sale to pay the mortgage plus any other closing costs and expenses. Oh, and you might want to walk away with an extra chunk of change as well.
If your home is not in tip-top shape, you might be responsible for some of the repairs as part of a contract of sale. Most real estate sales involve home inspections. The inspector might find mold or termites or a leaky roof or a cracked foundation---you name it, they’ll find it. As the seller, you are responsible for fixing these problems. The repair costs will come out of your remaining proceeds.
Other Closing Costs
Sellers can also be responsible for some closing costs, and your share will also be subtracted--you guessed it--from your proceeds. You may have to pay a real estate lawyer, and there are usually taxes and fees involved with transferring the title of your home to the buyer. Any real estate taxes due up until the date of closing with come out of the proceeds as well.
Some people think that overpricing their home will give them a good chance at a more significant profit when it can actually lead to some pretty nasty consequences. Months on the market will make homebuyers wary. You’ll still have financial obligations to the house, even if it rots on the market. Your real estate agent has a lot of knowledge about the current climate and will be able to help you price your house to sell so you can get your hands on the profits much faster.
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