Many home sellers fail to account for closing costs when estimating how much money they're going to make from the sale. These costs are not insignificant so they can come as a nasty shock if you're not prepared for them.
Closing costs for Maine sellers typically range from 1% to 3% of the final selling price of the home. Importantly, this is on top of realtor commission fees, which are the seller's responsibility. The average Maine realtor commission rate is 6%.
If you're looking to save on the cost of selling your home, Clever can help.
Clever negotiates reduced rates with top agents across the state of Maine, saving you up to 50% on commission fees.
In the meantime, read on to learn more about closing costs in Maine: how they work, how much you'll have to pay, how to save, and more.
What are closing costs?
Closing is the final step of the home selling process. Closing costs are the fees and expenses needed to complete this phase, not including agent commissions.
During closing, funds and official ownership documents are exchanged in order to transfer ownership of the home to the buyer. This process is carried out by a third party, such as a title company or real estate attorney, to ensure the terms of the agreement are met by both the buyer and seller.
How much are closing costs in Maine?
The costs for sellers will vary depending on where you live, but are generally around 1-3%. While buyers can expect to pay a bit more in fees than sellers (about 3-4%), remember that the sellers are usually responsible for the entirety of the agent commissions in addition to their closing fees.
If you’re looking to reduce costs, looking into a low-commission agent is a great way to pay less overall.
How to Calculate Your Closing Costs in Maine
Closing costs depend on the value of your property, as well as the fees required where you live. The median home value estimate for Maine is $234,700 (as of July 2019).
This means that sellers should expect to pay $2,347 to $7,041 (1-3%) to close a sale on a home at this price.
While you’re preparing to sell your home, take time to budget final closing costs early in the process. Because you won’t know the exact amount until it’s time to close, it’s a wise idea to include a bit more than you need.
Tools such as Zillow’s home value "Zestimates" can give you a ballpark sense of the average home price in your area. Just note though that these are only estimates with a margin of error.
Talk to a real estate agent for a more accurate sense of what you can list your home for and what kind of costs you can incur throughout the process. They can produce a comparative market analysis (CMA) and a net sheet for your home, so you’ll have a better sense of how much cash you’ll actually walk away with after closing.
> Learn more about how CMAs can provide an accurate valuation for your selling your home.
What’s included in Maine closing costs?
While sellers and buyers are responsible for separate closing costs, who pays what is negotiable. A buyer might submit and offer that asks you to cover some of their closing costs so it’s essential to know about all possible costs and what they amount to.
In Maine, you can expect the following closing costs when selling a home:
Title search: $300-$500
This confirms the seller is the legal owner of the property and makes sure there are no outstanding liens on the home that would prevent a clean sale.
Title insurance: $1,000-$2,000
This gives additional protection to the lender and/or buyer in case issues turn up that were missed during the title search.
Home inspection: $300-$500
Home inspections verify the condition of the house and check for any repairs that may be needed.
A report by a licensed appraiser verifies the property’s value. Note that this is usually required by lenders, and since the fee is paid directly to the appraiser, it will be nonrefundable even if the loan is not secured.
In some states, lenders require a survey, which maps the property lines and legal boundaries.
In Maine, a survey affidavit may be substituted. For a survey affidavit, the sellers essentially swear that the property’s boundaries have not been changed during their ownership. The cost of a survey affidavit in Maine is about $50.
Credit Report: $25-$50
This is for the lender to run a credit report check to verify the buyer’s credit.
Loan Payoff Costs: Varies, Around 0.5-1.5% of the Home Price
These are charged by the lender to cover processing the buyer’s loan. They include an origination fee to cover the lender’s costs during the underwriting process, as well as smaller fees for the loan application and for prepaying the first month’s interest.
Mortgage Payoff and Prepayment Penalty: Varies
Sellers will pay any amount remaining on their home mortgage at closing.
Note that some lenders charge a penalty for prepaying your loan before the end of its term. You should check with your lender to see if there are any such penalties, and what the cost will be.
Outstanding Amounts Owed on the Property: Varies
These include bills such as property taxes, utilities, homeowners insurance, and HOA dues (if applicable). These will be prorated so the seller is responsible until the date of closing.
Transfer Taxes: Varies
This is a tax on the sale transaction. The amount will vary depending on your jurisdiction and property value.
Recording Fees: Varies
These cover your title company, escrow agent, or attorney filing the deed of property transfer with the county. This is usually a modest fee, set by each county.
Settlement or Attorney fee: Varies
The settlement fee is paid to the title company or escrow agent for their services handling your closing. This typically amounts to about 0.2% of the sale price.
Maine requires a real estate attorney be present during transactions. Attorney fees vary, but are around $150-500.
While the state of Maine doesn’t have additional requirements to close, some jurisdictions might. Counties sometimes require fees covering flood zone certification, septic system inspection, radon testing, and more.
A real estate agent can tell you about any locally-mandated requirements.
Other Home Selling Costs in Maine
While buyers are usually responsible for more of the day-of closing fees, there are still significant costs that the seller needs to account for.
During the home inspection, repairs will likely arise. Some issues — such as structural defects and safety hazards — might need to be repaired before you can easily close your sale. Many lenders require these issues to be resolved before they provide a loan.
More minor cosmetic and maintenance repairs can wait until after the sale, but the buyer may likely want to negotiate for you to cover some of the cost.
The biggest cost for the seller can be real estate agent commission fees. In Maine, the average commission is 6% of the home sale price, with the seller responsible for both their agent and the buyer’s agent.
To save money, reach out to start a conversation with a Clever Partner Agent who will only charge a flat commission of $3,000 for a sale under $350,000, or a rate of 1% above that.
Who pays closing costs in Maine?
Typical Seller Closing Costs
The seller is typically responsible for:
- Mortgage payoff and prepayment penalty (if applicable)
- Outstanding amounts owed on the property
- Transfer taxes (in Maine, these are split between the seller and buyer)
- Recording fees
- Seller’s attorney fees (if applicable)
Typical Buyer Closing Costs
During closing, the buyer is usually responsible for:
- Loan-related fees
- Credit report fee
- Title search fee
- Lender’s title insurance
- Home inspection fee
- Appraisal fee
- Transfer taxes (in Maine, these are split between the seller and buyer)
- Survey fee (if applicable)
- Settlement fee (if applicable)
- Attorney fees (if applicable)
Should you pay the buyer’s closing costs?
In some instances, the seller might offer to cover some of the buyer’s closing costs. Down payments and closing costs can be big obstacles for buyers, so by covering some of these expenses, you might be able to gain an advantage over competing properties.
Another time you might pay some of the buyer’s closing costs are as a concession during the negotiation process. For example, if an issue is found during the home inspection, you might negotiate a concession to make up for it.
Key Takeaways for Maine Home Sellers
Maine is a hot market, and while selling a home can be an exciting time, it is difficult to plan ahead for precise closing costs.
Closing fees are generally less for sellers than buyers, but when you factor in agent commissions, there are still high costs to sell your home.
The best thing you can do to prepare is to seek out an experienced real estate agent, tax advisor, or attorney to guide you through the process and help meet your financial goals.
If you’re looking to save money on the cost of selling your home in Maine, Clever can help!
Clever negotiates reduced commission rates with top-rated, full-service realtors from major brokerages like Keller Williams, Compass, and Century 21, saving you up to 50% on your commission fees.
> Reach out if you’d like to learn more and connect with a top-rated listing agent who will help you sell your home for a fraction of the typical cost.