What kind of settlement statement fees should you expect to pay during the closing of your home sale?
This subject is a bit of a mystery to many home sellers out there, and because of that, they don’t know what their actual net profit will end up being. Here are the general fees you can expect from your settlement statement:
1. County taxes. It can get confusing trying to understand how property taxes are calculated here in Oregon, but the title company usually walks you through this at the closing table. In general, your property tax bill arrives between October or November and is due and payable in November. In most cases, people have their mortgage company pay this bill for them, but it’s important to remember that the county doesn’t officially collect these payments until June 31 to July 31 of the following year.
Depending on the month you sell, you’ll either get a credit or debit on your settlement statement. If your home sale is scheduled to close before June, you’ll usually get a credit; if it’s past June, you’ll usually get a debit.
2. Commissions. When you pay an agent to help sell your property, they’ll divide their commission fee between what they get paid and what the buyer’s agent gets paid.
3. A government search fee. This is usually between $25 and $35 on average.
4. The escrow fee. We pay escrow companies to ensure that all parties stay in compliance—they’re a neutral third party that’s there to verify that every penny in the transaction is accounted for and all the paperwork is correct. They also provide a title insurance policy, which brings us to our next fee…
5. Reconveyance for the loan. There’s a cost to pulling a lien off a property, and that cost is usually around $165.
6. The owner’s title insurance policy. This policy protects both the new owner and the new owner’s lender. In most cases, the buyer’s lender will require a title insurance policy so that their title is clear, uncontested, and all the liens are paid in full. This fee is usually based on the loan amount of the property. To get a general idea, though, for a home with a sale price of $380,000, the cost is around $834.
7. Home warranty. If you decide to pay the home warranty for the new owner, it can cost anywhere from $350 to $600.
8. Repairs. Sometimes sellers pay for repairs for the buyer before the sale closes escrow, and they’ll send the invoice of those repairs to the escrow company to take the cost out of their proceeds. It usually ends up as a deduction in their settlement statement.
9. How much you still owe on your loan. If you have a mortgage or HELOC on the property, it will show exactly how much you have left to pay on that loan so that you can pay it off.
If you’re curious what your net profit will look like for your home sale, give us a call and we’d be happy to give you an estimate. As always, if you have any other real estate questions, feel free to reach out to us as well. We look forward to hearing from you.