Closing costs can take a huge chunk of money from a seller’s profits. Here’s a breakdown of what fees make up closing costs in North Carolina, how much they are, and who is responsible for paying them.
On closing day you’ll finish signing paperwork and officially transfer ownership of your home to the buyer. You’ll also pay closing costs and real estate agent commission.
Closing costs are the expenses that accrue during a real estate transaction and include title insurance, credit checks, home inspections, appraisal fees, and more. All told, closing costs can total between 2-7% of the final sales price in North Carolina, but sellers are typically only responsible for 1-3%.
However, on closing day, you’ll also pay realtor commissions, which average 6% in North Carolina. To keep more money in your pocket, consider working with a discount agent who can save you thousands on agent commissions.
In the meantime, here’s everything you need to know about closing costs in North Carolina.
What are closing costs?
“Closing costs” is an umbrella term for all the fees that relate to finalizing a real estate sale. These fees include things like transfer taxes, surveying costs, recording fees, and title search — just to name a few.
The buyer pays most of the closing costs, but the seller is responsible for a portion, plus real estate commissions. As the seller, your end is deducted from your sale proceeds, assuming you have enough equity built up.
Closing costs vary by city and state. For example, North Carolina charges sellers an excise tax, which isn’t found in any other state. Also, who pays which closing costs can differ based on your location or the purchase agreement you signed.
How much are closing costs in North Carolina?
According to Zillow, the median sale price in North Carolina is $205,300. Considering sellers pay between 1-3% in closing costs, most sellers can expect to pay between $2,053 and $6,159.
However, remember that this doesn’t include commission fees, which are also due at closing. On a median-priced home, you’d pay another 6%, or $12,318.
How to Calculate Your Closing Costs in North Carolina
You can estimate your closing costs by multiplying the final price of your home by 0.01 (for the low end of the range). If you then multiply the price by 0.03, you’ll get the higher end of the range.
That’s just a ballpark figure, though. Keep in mind that your closing costs can vary, depending on factors like your location and the specifics of your house. A local real estate agent will be able to provide you with a net sheet that breaks down all your costs more precisely.
What’s included in North Carolina closing costs?
North Carolina closing costs are split between the buyer and seller. But who pays what is negotiable. In case a buyer presents an offer asking you to pay some of their closing costs, it’s important to know what they all are.
Let’s break down exactly what makes up North Carolina closing costs.
Title search: $300-$600
A title search makes sure you’re the actual owner of the property, and that there are no outstanding liens or judgments. In North Carolina, the title search is usually done by the attorney, so this charge will be added to their fee.
Title insurance: $1,000
The lender and the buyer purchase require title insurance policies to protect themselves in case problems with the title emerge after closing. Better safe than sorry!
Home inspection: $300-$500
An inspection makes sure there are no serious problems with the property or its major systems.
A certified expert will appraise your home to make sure that it’s objectively worth what the lender is loaning the buyer.
The survey establishes the precise legal boundaries of the property. In many states, a survey is required when there’s a home loan involved.
Credit Report: $20-$50 per report
The lender has an obligation to look into the creditworthiness of the buyer. They’ll get credit reports from at least one of the three major credit bureaus.
Loan Payoff Costs: 0.5-1.5% of sale price
These costs include loan origination fees, prepaid interest, and application/assumption fees.
Mortgage Payoff/Prepayment Penalty: Variable
Closing is when you settle any outstanding balance on your mortgage. Some lenders will charge you a penalty for paying off your loan before the end of the term. Consult your lender or bank to find out if there’s a prepayment penalty and, if so, how much it is.
Outstanding Amounts Owed on the Property: Variable
This includes charges like utilities, property taxes, homeowners insurance, and HOA dues; the amount of these fees will be prorated to the day of closing.
Transfer Taxes: 1-2% of the sale price
In North Carolina, the state charges an excise tax of $2 for every $1,000 of the sale price.
Recording Fees: Variable
Your attorney will file the physical deed that transfers the property to the buyer with the county office; the recording fee is what they charge to change the ownership in their files.
Attorney Fees: $700-$1,200
In North Carolina, the closing is generally handled by an attorney. Their rate can change based on the price of the house, and the length of the transaction, but fees start at around $700.
Termite Report: $85-$250
North Carolina requires a pest inspection and termite report within 30 days of closing.
Other Home Selling Costs in North Carolina
Sellers will also incur other costs before and during the sales process. Preparing the home for market can cost anywhere from a few hundred to a few thousand dollars, depending on how many repairs are needed. And if the house is vacant or needs updated furniture, staging can add several hundred dollars on top of that.
Then there’s real estate commission. The average real estate commission rate in North Carolina is 6%, so that means selling a home worth the state’s median value of $189,000, would rack up a commission of about $11,400.
Who pays closing costs in North Carolina?
Traditionally, the buyer and the seller split the closing costs in North Carolina — but it’s not an equal split. The buyer usually pays for more than the seller. Here’s what charges each party is typically responsible for:
Typical Seller Closing Costs
- Mortgage payoff and prepayment penalty
- Any outstanding liens, claims, or judgments against the property
- Attorney fees
- Buyer’s title insurance fee
- State excise tax
- Real estate commission
- Recording fee
- Prorated property taxes
Typical Buyer Closing Costs
- The lender’s title insurance
- Title search fee
- Credit report fees
- Loan-related fees
- Appraisal fee
- Home inspection fee
- Survey fee
- Settlement fee
- Buyer’s attorney fee
- Termite report
Should you pay the buyer’s closing costs?
There are certain circumstances in which you might want to pay some of the buyer’s closing costs. If they’re having trouble coming up with the down payment, covering their closing costs can allow the buyer to put more money down and qualify for a larger loan.
Also, if the buyer’s offer price is very good or the market is lukewarm, it can make sense for the seller to agree to these concessions.
Note: Some government loans cap seller concessions at 4% to 6%.
Key Takeaways for North Carolina Home Sellers
While sellers won’t be responsible for the majority of closing costs, they will have some financial responsibilities. On closing day, you’ll also pay real estate commissions, which is one of the largest fees in a transaction.
When it comes to negotiating your home sale, you should always consult with an experienced real estate agent, tax advisor, or attorney, to make sure you’re getting the best advice on how to proceed.
And if you’re trying to save on home selling costs, especially when it comes to that big 6% real estate commission, Clever can help save you thousands! Contact us today to learn about our full-service selling experience for a low, flat rate.