Boston condo closing costs for Sellers

Boston high rise condo closing costs for Sellers

When selling your Boston high rise condo you will incur some closing costs It’s hard not to feel blindsided by these costs, especially because they come at the end of the sale, and it isn’t always clear what exactly you’re paying for.

In this article, we will cover the following questions:

What does closing mean?
What are closing costs?
What expenses are included in closing costs?
How to calculate your closing costs?

What does closing mean?

Closing is the phase in the Boston condo process when money and documents are transferred in order to transfer ownership of your Boston high rise condo to the buyer. In a successful closing, both buyer and seller fulfill the agreements made in the contract. The seller will pay off all loans on the property to clear title, and the buyer and their lender will wire transfer money to cover the balance owed on the purchase.

What are closing costs?

Closing costs are an assortment of fees—separate from agent commissions—that are paid by both buyers and sellers at the close of a real estate transaction. In total, the costs range from around 1% to 7% of the sale price, but sellers typically pay anywhere from 1% to 3%, according to Realtor.com.

What expenses are included in closing costs that the seller is paying?

The following items can be included in seller closing costs:

Title insurance fees

Title insurance ensures that the home is truly yours to sell, and protects the buyer’s investment in the case that someone else makes a claim of ownership on the home. Sellers pay the new owner’s title insurance premium. This number varies widely depending on where you live, and the title company you work with.
Loan payoff costs

Mortgage payments are paid in arrears, unlike rent, which is paid in advance. Paying off your existing loan may actually cost more than the remaining balance because lenders charge for prorated interest. One trick for getting a rough estimate of what you’ll owe is to add one mortgage payment amount to your current balance.
Prepayment penalties

Some lenders charge prepayment penalties for paying a loan off early. These penalties can be anything from a percentage of your remaining balance, to a sliding scale fee based on the age of your loan. You’ll need to check with the lender to determine whether you have a prepayment penalty and what the costs of that penalty may be.
Unpaid Condo Fees

As the seller, you’ll owe any unpaid dues to your homeowners association at closing. The HOA may also charge fees for transferring the property to a new owner. Some of these transfer fees will be outlined in your home purchase contract. According to Movoto, you should expect the fee to cost between $100 to $400. You can also contact your HOA to get a clear understanding of what you will owe.
Transfer taxes or recording fees

Transfer taxes or recording fees are taxes charged by your state or local government when you transfer a title from one owner to another. Each state handles these differently. In some states, there are flat fees, while in others, the fees are a percentage of your sale price.

You can find your state’s specific information on the National Conference of State Legislatures website. Here’s a breakdown of transfer taxes in a few different places:
Attorney fees

Some states require an attorney to represent you at closing. Attorney’s fees can cost anywhere from $150 to $350 an hour. According to Wallethub, expect to pay $500 to $2,000 if you hire an attorney, depending on the complexity of the transaction.
Buyer credits

If you’ve agreed to cover any of the buyer’s closing fees in your contract, you’ll pay for that at closing. Buyer credits are entirely dependent on what you negotiate in your agreement.

Calculating your closing costs

Your costs at closing can vary widely depending on all of the above items—especially the laws in your area, the commission rates of the agents involved, your loan payoff costs, and title fees.

Every sale is different, so you may want to consult your agent early in the process to get a clearer sense of how much money you’ll need to come up with at closing. They’ll be able to give you a ballpark figure based on similar transactions. If you want to do some research yourself, do your math with one of the closing cost calculators that are available online.

Everyone deserves to have a clear idea of the fees they’ll pay at the close of a home sale. (We have also broken down the total cost of selling a home in a separate blog post.) Hopefully, this helps clarify closing costs and gives you the information you need to sell your home with confidence.