Most sellers want to know how much walk-away money they will get at closing. The answer depends on several factors such as contract selling price, any outstanding debts or liens, newly-incurred debts because of the property sale, and closing costs. Let’s look at each area to give you a broad understanding of what may be subtracted from the selling price.
The biggest single cost is usually the sales commission. You will have agreed a percentage or a fixed fee when you signed the listing agreement. Some real estate brokers also charge administration fees. As an example, Florida law requires brokers to keep the client file for seven years, so costs such as this can get passed on.
Anything you owe that is related directly to your property must be settled at or before you close. These include paying off your mortgage or HELOC, plus any admin fees your lender charges to handle all the admin associated with closing the file, recording the “note of satisfaction” in public records, etc.
All other unpaid liens against the property, if any, must also be settled at closing. These may include loans secured by the property, this year’s unpaid property taxes prorated to the day of closing, homeowner or condo association fees, etc. If you have paid fees in advance, the closing officer will calculate how much credit you get back. Your homeowner or condo association may also charge you an admin fee to change their ownership records.
The utility companies will take a final meter reading, and the amounts due are paid at or before closing.
Documentary Stamp Tax
Doc Stamps on the Deed, as this fee is often called, is charged by the Walton County Recorder. It is calculated at a rate of 70 cents per $100 of contract price.
If you are a non-US citizen, you may have 15% of the contract price withheld until the IRS is satisfied that all due taxes are paid. After that work is done, you will receive any remaining amount. If you are a non-US citizen, it pays to plan ahead, in case you can avoid any withholding of the sale proceeds, so seek advice from an attorney or the title agent.
Title and Closing Agent Fees
If in the contract you agreed to pay the title insurance premium, the rate is calculated on a sliding scale. The premium for the first $100,000 of contract price is a fixed $575, then the premium is calculated at $5 per $1000 up to $1 million of contract price, and then at $2.50 per $1000 up to $5 million.
The closing officer will charge settlement fees for managing the entire closing process, ensuring the documents are correct, handling the money involved, paying off debts, liaising with the Realtors, the property owner association, your lender, updating the public records, and forwarding all final documentation to you.
You may have agreed to cover some of the buyer’s costs, so they will need to be included as well as any repair costs agreed to. There may also be additional costs such as fax, courier and wire fees, especially if you choose to close by mail.