Massachusetts Closing Costs For a Seller
Author Bill Gassett owns Maximum Real Estate Exposure.
Are you thinking about selling your Massachusetts home? When you are selling a house, nobody likes surprises, especially when they are of a financial nature.
Many folks will have expectations about the costs involved with selling a home. When they are not accurate, it can be very disappointing. We will review a seller's closing costs to prevent that from happening.
What a seller pays in closing costs will differ greatly from what a buyer pays. If you have not sold a home in quite a while, you may not remember the fees involved.
We will set the record straight for you. Let's dig in.
What Are The Common Closing Costs For Massachusetts Home Sellers?
Massachusetts home sellers have three substantial closing costs: a real estate commission, tax stamps, and paying a real estate attorney. There are also some smaller miscellaneous fees we will discuss as well.
Real Estate Commission
Unless you are selling your home for sale by owner, you will pay a Realtor's commission.
A real estate commission is a fee paid to a real estate broker or agent for helping sell a home. It is typically split between the listing agent and the buyer’s agent.
The commission can range from 4-6 percent, depending on the area and the home type sold. It is important to understand that the commission is not a fee paid to the agent but to the brokerage. The agent then receives a split of the commission.
In most areas of Massachusetts, 5 percent is the most common commission charged by real estate agents. It is essential to offer a competitive rate when selling your home. Thinking you can discount the commission paid to a buyer's agent and you will net more money rarely happens.
You want the buyer's agent to be excited about selling your house - not the opposite.
One of the most surprising fees home sellers pay in Massachusetts is a tax to sell their homes. Working as a Hopkinton real estate agent for the past thirty-seven years, I can't tell you how often homeowners have been stunned when I break this news.
The fees are known as Massachusetts tax stamps.
Massachusetts home sellers will have to pay a tax stamp fee. This fee is also called a conveyance tax based on the home's sale price. It is usually $4.56 per $1,000 of the sale price in most parts of Massachusetts.
For example, if the home's sale price is $500,000, the tax stamp fee would be $2280.
The tax stamp rate of 4.56 applies to most of the state except Barnstable County, which charges 5.70 per thousand.
It is also worth mentioning that Nantucket and Dukes counties also pay an additional 2 percent of the sales price that goes to the local land bank.
Real Estate Attorney
Most Massachusetts home sellers will also hire a real estate attorney to help with closing. This attorney will review the contract, prepare the deed, and ensure all tax and legal paperwork is in order.
The fee for a real estate attorney typically ranges from $500 to $1,500, depending on the complexity of the transaction.
In addition to representing a seller during the contract negotiation phase, a real estate attorney will also attend the closing on behalf of the seller.
With buyers signing the bulk of the documents at closing, it makes little sense for sellers to attend anymore. Part of an attorney's role will be to do this for a homeowner.
Miscellaneous Closing Costs For Selling a Home in Massachusetts
While we have discussed the most costly fees for selling a Massachusetts home, they are some other smaller costs to selling a home.
For example, if you sell a property with a septic system, you must inspect it. The law that requires this is called Title V. To sell a home, a title v must be completed when a mortgage lender is involved.
A septic system inspection in Massachusetts will range between $800-1200. Septic systems are costly to replace, so most sellers will be on pins and needles, hoping the outcome is favorable.
Another requirement of home sellers is to provide the buyer with a smoke/carbon monoxide detector certificate.
The local fire department will inspect the smoke detectors and carbon monoxide detectors. You can expect this cost to run between $25-100 depending on the town you're located in.
The last fee you will be expected to pay as a seller is preparing a new deed for the buyer. Your attorney will be able to draw this up for you. You can expect the charge to be between $150-200.
Lastly, don't forget if you sell your house for a significant profit, you will have capital gains tax to pay.
Final Thoughts on Closing Costs in Massachusetts For Sellers
In summary, Massachusetts home sellers will pay closing costs, including a real estate commission, tax stamps, a real estate attorney, and miscellaneous fees. One must be aware of these costs before selling a home to avoid surprises.
An excellent real estate agent will always cover the expenses of selling a home.
Did you enjoy this advice on the closing costs for a Massachusetts home seller? See other real estate articles on NewsBreak for more timely tips and advice. Bill often writes about general real estate, mortgages, finance, moving, and home improvement.