hey I'm Zach McDonald your real estate
agent with real property associates and
in today's video we are going to talk
about seller closing costs and estimated
net proceeds sellers often ask me what
does it cost to sell my home and this
question comes more often from somebody
who has never sold a home before or it's
been a really long time and in this
video I want to talk a little bit about
the cost to sell your home and those
costs are called closing costs the first
closing costs you're gonna have as a
seller is real estate agent Commission's
these commissions are going to be
negotiated with your agent before
listing the home now typically these
Commission's are going to be somewhere
between five and six percent of the
purchase price depending on the agent
you're working with and other factors
now the way the Commission's are broken
down at least in Washington state is
you'll agree to pay the listing firm a
commission and then they will share a
portion of that with the buyer's agents
firm so typically if it's a 6%
Commission 3% traditionally is going to
be shared with the buyer's agent firm
the agent that brought the buyer
settlement costs are gonna be the second
cost you will have as a seller the first
part of those settlement costs are going
to be your escrow fee and this fee is
gonna pay the escrow company who is
going to be in charge of the money and
the contract and the signing part of the
transaction on the back end and this fee
is gonna be split 50/50 typically
between buyer and seller and then you'll
have the title insurance policy which is
going to be again a split fee typically
between buyer and seller the buyers
gonna pay for the lenders policy and
then you will end up paying for the
buyer seidel insurance policy and then
you're also going to have prorated
property taxes these are gonna be any
taxes for the period of time that you
have owned the home that you haven't
paid those property taxes for so for
example if you lived in the home from
you know January until March and then
you sold it you're going to be
responsible
for a portion of those taxes in that six
month period even if you are planning to
be moving out of the house before the
next property tax payments due you will
be responsible for the taxes in the
portion of that period that you lived in
the home the last settlement cost that
you'll have as the seller is going to be
the excise tax and this tax is a tax on
the sale of your property and it's going
to be based on the sale price I recently
did a video on the changes to the excise
tax rules in Washington and I'll link up
that video down below I think you'll
find it helpful if you want to get
really educated and really far into the
weeds how that all works but just know
that you'll have an additional tax on
the sale of the property as part of your
settlement costs the third closing cost
you're gonna have as a seller is your
mortgage payoff so most people are going
to have at least one mortgage that needs
to be paid off at closing
if you don't congratulations that's
really awesome and you're gonna get to
take home a lot more of the sales
proceeds but if you're like most people
you're going to have at least one
mortgage the escrow company will
facilitate the pay off of your loan
prior to closing now if you have other
loans on the property maybe you have a
second mortgage or you have some kind of
a home equity line of credit a HELOC
those will also need to be paid off
prior to closing additionally sometimes
there are other payoffs that are needed
and the most common would be something
like a contractor lien so I encountered
this not too long ago with a client
where the owner of the home had not paid
for work that was done and so that
company had put a lien on the property
which is essentially a claim of
ownership saying hey when this property
sells this debt needs to get paid off
and part of the title process is the
title company and researching that and
then finding those different payoffs
that need to get paid and so that
company had to be paid before we could
close on the sale buyer paid closing
costs are gonna be the fourth cost you
might have as a seller now in Washington
State it's not super common especially
in the
real-estate market to have sellers
paying buyers closing costs if the
markets less competitive or it's a tough
property to sell and the buyer really
needs the help
sometimes there are reasons that the
closing costs are worked into the sales
price and there are different ways that
can happen and different reasons that
might happen if you're interested in
learning more about that I have another
video linked up down in the description
where I go into a lot greater detail on
how to negotiate those closing costs
into a sale might be interesting if
you're a seller and you're watching this
video to see kind of what a buyer might
be thinking as well the fifth and final
set of closing costs or we'll call it a
bucket of closing costs is going to be
just a jump to work a miscellaneous
bunch of different costs that all add up
a little bit you're going to have if you
own a condo you'll have HOA dues that
might need to get paid off you may have
a special assessment that's been levied
and you might it might or might not have
agreed to pay all or a portion of that
off prior to closing you also have some
document prep fees and some recording
fees those are pretty minor those other
two that we just talked about are gonna
be usually bigger and then if you were
offered a home warranty to the buyer
that might also be one of the costs but
overall the big focus on this section is
going to be you know do you have a condo
that has a special assessment or
homeowner dues oh really quick there's
one other that I forgot the other cost
that you might not think of is any prep
work that you did prior to selling your
house so when you're going through this
list you've got all these closing costs
but then you also have the cost that you
put into the house prior to selling and
to get it ready for market so that would
also be a cost that you've already paid
but would come out of your final
proceeds in the end now the real reason
that people ask about seller closing
costs and are curious about seller
closing costs because they want to know
how much money they're gonna walk away
with so the first part of that is going
to come down to what's the sales price
of the home and then you're going to
deduct those closing costs
the equation and that's gonna give you
your final net proceeds now as a real
estate professional one of the things I
provide for clients is a market analysis
and that's where we look at comparable
sales we study the market I do market
update so I'm always studying the market
but we take into a consideration recent
sales that are similar to the home the
market conditions and then we come up
with that estimated value and discuss
the different strategies for that list
price now ultimately the sales price
comes down to what do a buyer and a
seller one to agree on so your house is
ultimately worth what somebody wants to
pay for it and you'll agree - so that
ends up meaning that sales price you
deduct these closing costs from that
equation and then you come up with the
net proceeds and so I also will prepare
an estimated net proceeds worksheet
prior to listing the house so we'll do
that market analysis first and then we
will base our estimated net proceeds off
of our target list price and maybe even
a couple other potential sales prices so
that you can see what you will
potentially be walking away with because
as we know that's the primary concern
what am I going to walk away with I hope
you found this video on seller closing
costs and estimated net proceeds helpful
for you and if you would please do me
the favor and give this video a thumbs
up and if you know somebody that could
benefit from this information please
consider sharing with them bye for now