August 16, 2017 in Real Estate

Selling your home? You can minimize closing costs

So, you’ve decided to sell your home and of course, you want to maximize your profits. Before you cash out, you’ll need to pay some fees and commissions. Although buyers incur more fees, sellers’ closing costs are more expensive. As a seller, you can expect to pay up to 10 percent in fees and commissions.

You won’t be expected to pay these costs upfront; rather, they will be deducted from the profit of your home at the time of the sale. Here are the costs you’ll pay and some tips to trim your closing costs.

Reduce your closing costs

Closing costs are inevitable, but there are some ways to minimize them. Some homeowners forgo listing their homes through a broker to avoid paying the Realtor commissions. However, your home might not receive as much traffic as it would with a broker involved. It’s a time-consuming and labor-intensive approach. You might also find that buyers expect a significant discount given that you didn’t use an agent.

Many homeowners are turning to discount agents to reduce their fees without taking on the heavy lifting that’s involved with selling a home. Some discount agents offer home staging, marketing, listing and transaction services at discounted fees. In return, homeowners show the home and do most of the sales work.

Other agents like Redfin offer full real estate services at a lower commission. Instead of paying your listing agent 3 percent, you’d pay Redfin 1 percent. Keep in mind, however, that you’ll still be required to pay the buyer’s agent 3 percent. Still, saving 2 percent on a $300,000 home saves you $6,000.  

Title insurance

If you’ve agreed to pay for the buyer’s title insurance, consider working with the buyer to shop around for the best rate. Their lender may have a preferred title insurance company they work with, but that insurance company may not offer the best rate. If you bought title insurance when you bought the home and that was fewer than 10 years ago, ask your attorney or the title insurance company if you qualify for a reissue rate. If you’re not sure whether you bought title insurance, look at your original HUD-1 settlement statement. It will state whether you bought coverage. If you are eligible for a re-issue rate, this could save as much as 40 percent.