Key Insights on Closing Costs for Home Sellers in Western North Carolina and Upstate South Carolina

Understanding Closing Costs When Selling Your Home

Selling a home is an exciting milestone, but it comes with expenses that can catch you off guard. Picture this: you’re at the closing table, expecting to walk away with a solid profit, only to find thousands of dollars deducted from your earnings. That’s the reality of closing costs, and if you don’t prepare for them, they can significantly impact your proceeds.

This post will break down the costs typically incurred by sellers, why they exist, and how to retain more of your money when selling your home.

What Are Closing Costs?

Closing costs are the final expenses you incur to complete the sale of your home. They encompass everything from real estate fees to title transfers and legal charges. Typically, sellers in Western North Carolina and Upstate South Carolina pay about 6% to 10% of the home’s sale price in closing costs.

Understanding these costs ahead of time can help you budget properly and avoid last-minute surprises.

The Most Common Closing Costs for Home Sellers

1. Real Estate Agent Fees

Real estate commissions remain a key expense for many sellers, but recent changes have made them more flexible and negotiable. Sellers are no longer required to cover the buyer’s agent commission, and all commission agreements must be clearly disclosed and agreed upon upfront.

How Much Do Commissions Cost?

Traditionally, commission rates ranged from 5% to 6% of the sale price. However, with the new rules, commission structures vary more widely and are subject to direct negotiation between sellers, buyers, and agents.

Who Pays the Commission?

• Sellers may still choose to pay the buyer’s agent commission, but it is no longer an industry standard.
• Some buyers may now be responsible for paying their own agent’s commission.
• Listing agents still charge a fee for marketing, negotiations, and transaction management, but the rate is now more customizable.

2. Transfer Taxes and Recording Fees

Transfer taxes are state and local charges for legally transferring ownership of your home.

• Typical Cost: Varies but can range from 0.5% to 2% of the sale price.
• Responsibility: In many areas around Western North Carolina and Upstate South Carolina, sellers cover these costs, though this can be negotiated with the buyer.

3. Title Insurance (Owner’s Policy)

Title insurance protects buyers from legal disputes regarding ownership. Although buyers usually buy their own policy, many sellers cover the owner’s title policy cost.

• Necessity: Not mandatory but typically expected as part of the sale process.
• Typical Cost: Usually between 0.5% and 1% of the home’s sale price.

4. Escrow and Closing Fees

Escrow companies manage funds and documents to secure the transaction. These fees also cover the paperwork required to finalize the sale.

• Escrow Company Functions:
• Hold funds securely.
• Ensure all contract terms are met before money changes hands.
• Typical Cost: Between $500 and $2,000, depending on location and provider.

5. Prorated Property Taxes

Since property taxes are paid annually, you’ll need to cover your share up until the closing date.

• Calculation Method: Total property tax is split based on the number of days you owned the home that year.
• Example: If property taxes are $6,000 per year and you sell halfway through the year, you owe $3,000 in prorated taxes.

6. Homeowners Association (HOA) Fees

If your home is part of an HOA, additional fees may be due at closing.

• Outstanding Dues: Any unpaid HOA fees must be settled before closing.
• Transfer Fees: Some HOAs charge a fee between $200 and $1,000 to process ownership changes.

7. Attorney Fees (If Required)

In certain states, including parts of Western North Carolina and Upstate South Carolina, you may need a real estate attorney to review and finalize the sale.

• Typical Cost: Generally $500 to $1,500.
• Attorney Functions:
• Review contracts and closing documents.
• Ensure legal compliance.

How to Reduce Your Closing Costs

Closing costs can take a sizable chunk out of your home sale profits, but the good news is that there are ways to cut back on these expenses. Whether through negotiation, strategic choices, or finding cost-effective service providers, you have options to keep more money in your pocket. Here are some practical ways to lower your closing costs as a seller.

Sell Without an Agent (FSBO) — this means no listing agent commission. However, you’ll still need to:

• Pay the buyer’s agent commission (usually 2.5% to 3%).
• Handle marketing, negotiations, and paperwork yourself.

FSBO works best if you have experience in real estate or a buyer already lined up.

Ask the Buyer to Cover Some Costs

• In some deals, buyers agree to cover certain closing costs instead of negotiating a lower sale price.
• This works best in a seller’s market, where buyers compete for homes.

Shop Around for Service Providers

• Get multiple quotes for title insurance, escrow services, and attorneys.
• Some companies offer discounts for bundled services.

Preparing for Closing

As you approach the finish line of your home sale, there are still a few final steps to take before closing day. Proper preparation can help avoid last-minute surprises and ensure everything goes smoothly. Here’s what you need to do before handing over the keys.

1. Review the Closing Disclosure Early

• You’ll get a Closing Disclosure a few days before closing that lists all costs.
• Review it carefully to catch any unexpected charges.

2. Finalize Repairs and Paperwork

• Complete any agreed-upon repairs before closing.

Make sure liens, HOA fees, and taxes are paid to avoid delays.

Final Thoughts

Selling a home involves more than just finding a buyer. Closing costs can add up, but with some preparation and knowledge, you can keep more of your profit.