Essential Costs to Expect When Selling Your Home
When selling your home, it’s important to be aware of the various costs that may arise throughout the process. Here’s a breakdown of the key fees and expenses you may encounter:
Before closing, you’ll need to sign a release authorization for the Title Company or Attorney to obtain the exact payoff amount for your mortgage. This ensures the correct amount is paid off at closing. The Title Company will then issue a check from your proceeds to settle the mortgage balance.
Similar to your mortgage, any outstanding balances on lines of credit or home equity lines of credit (HELOCs) must be paid off. The closing company will request this information and, if necessary, pay off any balances from your proceeds.
Some mortgages have a prepayment penalty clause. This means that if you pay off your loan early (in this case, due to the sale of your home), you might incur an additional fee. Make sure to check with your lender to determine if a prepayment penalty applies, as well as any interest due based on your closing date.
To ensure that the sale goes smoothly, a Title Company will conduct a title search to identify any unpaid taxes or liens on your property. If there are any, these will need to be settled before closing. The closing company will pay these outstanding fees from your proceeds.
Special assessments are charges from local government entities for improvements like water, sewer, or road work that benefit your property. Some special assessments must be paid off before closing, while others can be assumed by the buyer. If they need to be paid off, the closing company will handle these payments using your sale proceeds.
