How to Determine Closing Costs As a Seller

Determining the closing costs as a seller in any real estate deal is really a simple process. Selling raw land in most areas is easier to determine than that of buying a home. Because insurance and utility bills are not included in the transaction, the most difficult item to determine in a raw land deal will be the taxes. Let's break down the basic items you'll focus on in determining the closing costs of a new residential lot.

The first consideration will be the taxes on the lot. In most areas, at closing, the seller will pay the buyer the prorated amount for the taxes on the lot. At the end of the year, the buyer will be liable for the full amount of the tax bill. Let's make a simple example to show how this process works. If the annual tax bill on the lot is $ 365 and the closing date was January 10th (the 10th day of the year), then the seller would pay the buyer $ 10 dollars as their portion of the taxes at closing. Note that we are keeping the example simple, as each day, the taxes on the lot equal 1 dollar. The buyer collects the $ 10 dollar prorated amount at closing, and at the end of the year, the buyer is liable for the full amount, or $ 365.

Next, there are attorney fees to consider. The primary responsibility that the seller has for the sale of raw land or a residential lot is having the prepared prepared and delivered to the buyer by closing. The preparation fee of having the deed ready at closing will vary according to the attorney that is chosen. Generally, for the preparation preparation on a residential lot, the cost can be as little as $ 150, or as high as $ 250 dollars. Of course these rates vary, depending on the state or region you are acquiring the land or lot. If you are a real estate agent, it is wise to have a regular attorney you trust and can depend on. This way, you'll have a pretty good idea on what your attorney fees will be. In addition to the destruction preparation, there may be recording fees and / or courier fees added to the sellers closing costs. These are generally less than $ 50.

There are also executed stamps to consider. This is a transfer of ownership tax charged by the county that the land or lot is located. Let's give an example of how the stamp stamp tax would be calculated. Let's say that the tax is $ 1.85 per every $ 500 dollars. If the lot sale price were $ 200,000, then the stamp stamp tax would be $ 740. To easily calculate the stamp stamp tax, in this case, divide the contract price by 500, and then multiply it by $ 1.85. This determines the amount due by the seller at the closing of the land or lot.

Finally, there is the real estate commission involved in the sale of the land or lot. This is the percentage or amount that the seller of the land or lot will pay to the real estate agency. Because of the anti-trust laws, a real estate brokerage firm is never allowed to base their commission percentage on what other real estate brokerage firms are charging. You, as the seller, should check with your real estate brokerage firm to find out what the commission fee will be. The fee is generally lower for raw land or lots than it is for a home site with a lodging already established. The seller can then use this amount to deduct it from the sale price of the land or lot, or add it to the closing costs.

Sellers should always check with a reputable real estate attorney to be certain that all information given is completely accurate. This information is extremely reliable, but sellers should definitely seek the advice of a real estate attorney for any guarantees.

Source by Blake Templeton