Tag: seller tips

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Closing Costs For Buyers and Sellers

If you have bought or sold a home, the final step in finalizing that sale is when you close. There will be alot of paperwork to complete and the closing costs will be indicated at this time. Most homebuyers are aware that their will be closing costs but many sellers are surprised to find that they are responsible for closing costs as well. 

Closing costs refer to all of the taxes, fees and costs required to close a real estate transaction. The amount and who will be responsible can vary from state to state.

If you are sellling your home, it is important to ask your agent for a breakdown of what you are expected to pay in closing costs as well what the buyer will pay. In most states the buyer and seller split closing costs but some states consider the buyer to be responsible or both parties can be required to pay the costs. 

The real estate market can have an impact on on who will be responsible for paying closing costs. For example in a market that is plentiful, the seller could have more of a chance in having the buyer pay the majority of the closing costs. But in a market that is struggling such as now, buyers tend to have the upper hand and many sellers will pay the majority of the closing costs in order to complete the sale.

Below are some of the common closing costs faced by sellers and buyers:

•Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller.
•Title insurance: There are usually two types of title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title.
•Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a reconveyance tax.
•Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property.
•Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are the states that collect this tax.
•Brokerage commission: The fee you contractually agreed to pay for the selling of your home.

Aside from these costs, the seller may be responsible for costs such as any credits that were promised to the buyer for repairs or home warranties. Don’t forget that Federal law requires that sellers and buyers receive a copy of a HUD-1 form outlining all charges in a real estate transaction.

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How To Have A Successful Negotiation

When it comes time to sell your home or if you are buying a new home , you will come to a point in the transaction where you will need to have a negotiation.  The negotiation process can be both complex and confusing for both sides. Of course the seller wants to get the highest amount they can and the buyer also needs to feel they have achieved the best deal. If  this is your first  negotiation or even if you are seasoned at this process, below are some tips to help you get the most from the negotiation transaction.

1. The current real estate status is a “buyers” market, where most sellers are very motivated to sell, this can give a buyer the upper hand. On the other side, in a “sellers” market, or a market where housing supply and demand are roughly equal might give the seller an advantage. If possible, you want to be in the market at a time when it favors your position as a buyer or seller. 

2. Always pay attention to the details. Buyers and seller pay a lot of attention to the actual transaction price. Don’t overlook the  other perks or benefits that can add to the overall worth. For example, if you negotiate that the roof be replaced or perhaps having the seller pay some of the closing costs this can sweeten the deal. Don’t be stuck with the idea that the purchase prince is the only financial gain to the transaction.

3. Don’t forget about financing. Keep in mind that there are several factors that can impact the final sale:

 • Has the buyer been pre-qualified or pre-approved by a lender? Having buyers that are “pre-qualified” or “pre-approved” are more likely to pose less risk than a buyer who has never met with a lender. This also shows the seller that they are serious about the offer and will give the seller more confidence. that they are a qualified buyer.

 •If there is a low interest rate, then there will be a larger selection of potential buyers. More buyers equal more potential demand, which is good news for sellers. On the downside, high interest rates will cause buyers to be more selective or cause them to withdrawal from the market all together.

 •The traditional 20% downpayment is not standard anymore. If the buyer has good credit, loans with 5 percent down or less are now widely available. Many loans where 100 percent financing are still available, although not as much as a few years back.

 Negotiation is an important tool of the real estate transaction. To be a successful home seller or buyer you should have a basic understanding of negotiation methods, knowing the motivation of the other party and adapting to their style.