What Are Closing Costs When Selling a House (And How to Avoid Them)?
Selling a house costs money - lost of it. While it is possible to make a profit selling your house, much of what you make above selling cost goes into a variety of selling costs, including realtor commissions and house preparation costs, which can eat into your profit by thousands of dollars.
To make matters worse, you have to pay closing costs, including payments and fees for services required to sell your house. Most closing costs come as a surprise to sellers because every transaction is unique. Even your realtor may not know the full scope of the closing costs until days before you close the sale.
Three Main Types of Closing Costs
It’s hard to put closing costs in a nutshell because there is a wide range of costs depending on your selling situation. From a broad perspective, there are three main types of closing costs.
Taxes can include transfer tax and a prorated property tax. A transfer tax is a tax you’ll pay when the title passes from you to your buyer. Prorated property taxes are any taxes left over after selling property. Once you sell your house, the new owner assumes responsibility.
Even after selling your house, you may be responsible for paying homeowner’s insurance for one to two more years. The main reason for this is to protect the new homeowner from any problems within the first year.
Home selling fees come out of nowhere, pile up, and eat you alive. Why are there so many fees? These agencies aren’t going to be free. Fees include HOA fees, escrow fees, lawyer fees, and title processing fees.
Why Do Sellers Pay All These Costs?
The answer is simple: sellers pay almost all closing costs because buyers don’t want to. Buyers will often use closing costs as leverage to close the deal. For instance, common buyer closing costs include application fees, tax servicing, pro-rated taxes, notary fees, and even inspection and appraisal fees.
If the buyer senses that you're desperate to sell your house fast or can’t find a buyer, they may negotiate a deal to pass all these costs on to you before they agree to buy the house. Sometimes the negotiation goes on between the selling realtor and the buyer realtor without you realizing it.
How Do I Avoid Closing Costs and Other Expenses?
If you are trying to sell your house the traditional way, you may be able to negotiate a deal with the buyer to pass some of the closing costs on to them. You can also shop for escrow companies, attorneys, and other agencies. Or, you may decide to attempt a For Sale by Owner and bypass many of these expenses.
However, the best way to avoid home selling closing costs is to sell your house as-is for cash to a company that buys houses in Cleveland, Ohio. In a cash home sale, the buyer agrees to buy your house as-is - meaning there are no repairs, inspections, or appraisals. The buyer agrees to pay up to 100 percent of the closing costs.
A cash sale can be especially helpful if you are in a situation where you need to sell your house fast and get out of your mortgage (bankruptcy, foreclosure, probate, etc.). A cash sale is also a private transaction. So, the most you’ll need to secure the deal is a title company, which the buyer typically provides and pays for.
Get a Fair Cash Offer from Home Buyers Ohio
If you need to sell your house fast in Cleveland, Ohio, we can help. We buy houses as-is. No repairs or upgrades are needed. Call 440-683-6165 to to get a fast cash offer.