During closing, ownership of your home is officially transferred to the buyer. At this point, you’ll also need to settle and expenses that have accrued during the transaction. These “closing costs” include Indiana filing fees, home inspection fees, costs of setting up a loan, and more.
For sellers, closing costs can range from 1% to 3% of the selling price, plus an average of 6% in real estate commissions for both the listing agent and the buyer’s agent. While most closing costs are unavoidable, sellers can save on commissions.
Reach out to Clever to learn how to save up to 50% on commission, which reduces the overall cost of selling your home.
In the meantime, here’s everything you need to know about seller closing costs in Indiana.
What are closing costs?
Closing is when the home sale is finalized, money is exchanged, and keys are handed over to the new owner. Closing costs are the fees incurred during the transaction and are settled at closing.
To avoid writing checks to different entities, an Indiana escrow or title company serves as a neutral third-party at closing. They will provide a statement listing out fees paid by the buyer and those paid by the seller to determine what a seller walks away with.
The escrow company makes sure the seller’s remaining mortgage balance, their closing costs, and any real estate agent commissions are paid appropriately. The remaining money is profit signed over to the seller. However, if the seller has little equity in their home, they may need to pay some amount out of pocket at closing.
How much are closing costs in Indiana?
In Indiana, the average closing costs for sellers range from 1% to 3% of the final selling price. Compare this to the average 2% to 5% for buyers and you’ll be thinking you got off easy.
But not so fast — you’ll also be on the hook for realtor commissions that run about 6% in total.
How to Calculate Your Closing Costs in Indiana
To determine a ballpark figure for what you can expect to pay in closing costs for your Indiana home, simply multiply its estimated selling price by the typical closing cost percentage — 1% to 3%.
For example, as of September 2019, the median value of an Indiana home was around $147,000. If you sold your home for this price, you could expect to pay $1,470 to $4,410 in closing costs.
What’s included in Indiana closing costs?
Buyers and sellers are typically responsible for separate closing costs. However, a buyer might present you with an offer that asks you to cover some of their closing costs. To determine if this is a good deal for you, you’ll need to be familiar with all Indiana closing costs.
Title Search & Exam Fees: $200
To ensure a clear title, a title search and exam goes through historical public records to find any past deeds, trusts, wills, or outstanding liens on the property to ensure a clear title. The seller typically pays these fees in Indiana.
Owner’s Title Insurance: $500-800
Title insurance covers the buyer and lender against future claims on the title of the home, such as undisclosed heirs, or mistakes in filing. The policy is good for as long as the new buyer owns the property and the one-time fee and coverage rate is based on the selling price of the home.
In Indiana, it is customary for the seller to pay for the buyer’s title insurance. The cost of a title policy for a home is about $500-$800.
Lender’s Title Insurance: Varies on Loan
If the buyer is using a mortgage to purchase the home, the lender requires their own title policy to cover its interest and this fee is usually paid by the buyer. Unlike the owner’s title insurance, the amount of coverage for the policy is related to the loan amount, instead of the purchase price.
Home Inspection: $300
Indiana home buyers often want the home to be inspected by a professional, to ensure there are no unknown problems or hazards.
A bit different than an inspection — which tells you every repair you may need to make to a home — an appraisal is done for the mortgage lender. It ensures the home is worth the amount being borrowed and is paid for by the buyer.
While generally not required in Indiana, a borrower’s lender may require a survey if it’s worried about future disputes about the property line. If this is the case, the buyer usually pays this fee since it relates to the mortgage.
Credit Report Fee: $25
A buyer’s lender will request a credit report before approval — thus, this fee is paid by the buyer.
Loan Payoff Costs: 0.5-1.5% of Purchase Price
Also related to the buyer’s new mortgage and paid by them, loan payoff costs may include origination fees, interest prepayment, or application fees.
Mortgage Payoff/Prepayment Penalty: Varies on Loan
Some lenders charge a penalty for paying your mortgage off early and this penalty could be based on your remaining balance or on the age of the loan. If you’re a seller, you’ll want to check your mortgage paperwork for details and plan to pay this amount at closing.
Outstanding Amounts Owed on the Property: Varies
The amount due for any outstanding property taxes, insurance, utilities, or HOA dues will be prorated to the closing date and paid by the seller.
Recording fees: $80-100
The buyer usually pays the fees for legally recording the new deed and mortgage so it becomes a matter of public record.
Settlement Fee: $2 per $1,000 of purchase price
In Indiana, your title company charges a settlement for closing and overseeing it as an independent party. This fee is usually paid by the buyer in Indiana, but can sometimes be split equally between buyer and seller.
Closing Protection Letter: $25-30
Sometimes a lender requirement, a closing protection letter is issued by the title company on behalf of the underwriter and agrees to compensate the lender should the title company make a mistake at closing. If necessary, the buyer would pay this fee. Sometimes the title company may issue a similar letter to the seller — in which case, the seller would pay the fee.
Deed Preparation: $75-100
The seller typically pays for an attorney to create a deed to transfer ownership from the seller to the buyer in Indiana.
Other Home Selling Costs in Indiana
Improvements and Repairs
Depending on the results of a home inspection and your negotiations with the buyer, you may have to factor in several thousand dollars for repairs prior to closing. You can either perform these repairs yourself, pay for a contractor to complete them, or negotiate that the selling price is reduced by the estimated amount of repairs.
Real Estate Agent Commissions
Commissions for both the listing agent and buyer’s agent are traditionally paid by the seller in Indiana. The average total commissions in Indiana are around 6% of the purchase price, split evenly between the listing and buyer’s agents.
Who pays closing costs in Indiana?
Typical Seller Closing Costs
Seller closing costs in Indiana typically run 1% to 3%, plus around 6% for realtor commissions. Here are some fees you can expect to pay as a seller:
- Buyer’s title insurance
- Mortgage payoff and prepayment penalty (if applicable)
- Outstanding amounts owed on the property (if applicable)
- Title search and exam fees
- Deed preparation
- Real estate agent commissions
Typical Buyer Closing Costs
Buyers in Indiana pay about 2% to 5% of the purchase price in closing costs on average. These fees may include:
- Lender’s title insurance
- Credit report fee
- Loan payoff costs
- Recording fees
- Settlement fee
- Closing protection letter
Should you pay the buyer’s closing costs?
As a seller in a buyer’s market, you may be able to get ahead of the competition if you’re willing to pay some of the buyer’s closing costs. You may be able to accept a higher offer but pay closing costs and your payout would be the same.
Be careful though — some mortgages set limits on costs the seller is allowed to pay and the appraisal must support the higher sales price. In a seller’s market, you shouldn’t have to worry much about this tactic.
Key Takeaways for Indiana Home Sellers
If you’re selling your home in Indiana, be prepared to pay up to 3% in closing costs and another 6% in realtor commissions. However, the amount will vary depending on your purchase agreement.
Seek guidance from an experienced real estate agent, tax advisor, or attorney in Indiana to find the best option for your specific situation.
A great way to save on overall costs at closing is to save on agent commissions. By working with a Clever Partner Agent, you can have the best of both worlds — full service at a discounted rate.
Partner Agents are top-rated real estate agents from major brands — like Century 21 or Keller Williams — and are experts in their local markets.
The only difference is that they have agreed to work for a flat fee of $3,000, or 1% if your home sells for more than $350,000. They provide all of the services or a traditional agent, so you don’t have to sacrifice the quality of service for the price.
Reach out to Clever to get matched with a top agent in your local market today.