The next question is what will I walk away with for money in my pocket if I sell my home? To calculate the net amount of proceeds, you need to calculate the seller’s closing costs from the gross proceeds.
What Will My Sellers Closing Costs in Massachusetts Be?
Your seller closing costs can be highly variable depending on many factors. I will run through the most common closing costs sellers will see.
The items listed below will most likely be on your Sellers Closing Disclosure, a document providing you the accounting of the transaction prior to the closing
Mortgage Payoff- The mortgage payoff is the balance owed on all mortgages against the property. Don’t forget to calculate second mortgages and home equity lines of credit as well. Your payoffs will usually be listed on your last mortgage statement. As a rule of thumb add one months mortgage payment to get close to the actual payoff. Because you are always be paying interest in arrears, there will be additional interest that will not be calculated in your last mortgage statement.
Real Estate Commission- Your real estate commission will probably be the second largest expense you need to deduct from your net proceeds. Your commissions can be highly variable… typically from 4-7%. Real Estate Commissions are typically a percentage of the sale price but it could be a flat fee as well. So if you sold your house for $300,000 at a 5% commission then you would be paying your agent $15,000 at closing.
Tax Stamps- Tax stamps are an excise tax collected from the state on the sale of your home. The tax stamp is .456% of the sale price, or $4.56 cents for every thousand dollars. Some counties have additional tax stamps and you should consult your real estate agent. The tax stamps is one often overlooked fee, especially if you have never owned a home before. A $300,000 sale would be $1368.00 in tax stamps
Deed Preparation- It is the sellers responsibility to prepare a new deed to pass on to the buyer. Deed preparation usually costs between, $150 to $200. You can either have your own attorney prepare the deed or just have the closing attorney prepare the deed.
Wiring Fees- Wiring fees are to get your mortgage payoff to the lien holders on your property. The fees will run about $25 to $50 per lien on your property.
Overnight Charges- Fedex will be used to get any documents your lien holders will need to close out your loan. Typical charges will be $25 to $50 a lien.
Mortgage Discharge- You will also be responsible to pay for the discharge of any liens you have on the property. The fees for each lien will run $50 to $100 a lien.
Additional sellers closing costs in Massachusetts
The following costs may be paid outside the closing or are optional, but should be factored into finding how much money you will pocket after your home sale.
Title V Certificate- If your property is on a septic system, it will be your responsibility to certify that it complies with the state requirement though a Title V Certificate. The cost of obtaining a certificate is about $600 to $800.
Attorney Fees- (optional) You do not need an attorney to sell a home in Massachusetts but many sellers opt to hire an attorney to review their purchase and sale. Other seller may even opt to have an attorney attend the closing to review all of the documents you will be signing. The costs of an attorney can typically run between $400 to $1200.
Moving Costs- This can be a significant cost but if you are counting every penny don’t forget to include moving costs. It could be anything from truck rental to purchasing packaging supplies to a full blown pack and move. A truck rental could be as little as a hundred dollars or less to a full blown pack and move costing well into the thousands.
Seller Paid Closing Costs for a Buyer- (optional) Sometimes a home buyer will negotiate for the seller to pay all or some of their closing costs. You will seen a line item called seller paid closing costs on your sellers closing disclosure. If you have agreed to pay these costs don’t forget to include that in your calculations to see how much you will net from a home sale.
If you own a condo there will be other seller closing costs associated with the sale
6D Certificate- The 6D certificate certifies that no back monies are owed to the condo association. You will contact your condo management company or association treasurer to prepare the document. Most condos will have a fee of $50 to $100 to provide you with the certificate.
Condo Documents- One aspect of listing a condominium for sale is providing prospective buyers with the current condo documents. The documents would be the master deed and bylaws along with any addendum’s as well a a current years budget. If you do not have them in your possession most likely you will be charged anywhere from $50-$400 for a complete package.
Your real estate agent will be happy to provide you with a net sheet to give you a fairly accurate idea of how much your home sale will net you.