What You Need to Know About Closing Costs for Home Sellers on the North Shore

Selling a home is a big deal, especially on the North Shore, but it comes with some expenses that might surprise you. Picture this: you're at the closing table, expecting a hefty profit, only to see a chunk of that money going towards various costs. Closing costs can put a dent in your proceeds if you aren't ready for them.

In this post, we'll go over the costs sellers typically incur, why these costs exist, and how you can keep more of your money when selling your home.

What Are Closing Costs?

Closing costs are the final expenses required to seal the deal on your home sale. They include everything from real estate commissions to title transfers and legal fees. On the North Shore, sellers typically pay anywhere from 6% to 10% of the home’s sale price in closing costs.

Understanding these costs in advance can help you budget properly and avoid any surprise expenses at the last moment.

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

The North Shore has its share of state and local fees for legally transferring the ownership of your home.

• How much do transfer taxes cost? They can range from 0.5% to 2% of the sale price depending on the local regulations.
• Who pays these taxes? In many scenarios, the seller foots the bill, although sometimes the buyer might agree to share or take on this cost based on contract terms.

3. Title Insurance (Owner’s Policy)

Title insurance provides protection against any ownership disputes or legal issues related to the property. While buyers generally purchase their own policy, many sellers provide an owner’s policy to sweeten the deal.

• Is title insurance mandatory? Not exactly, but it's often expected in a sale transaction.
• Cost: Usually between 0.5% to 1% of the home’s sale price.

4. Escrow and Closing Fees

Escrow services manage the funds and documents to ensure a smooth transaction. These fees also cover the final paperwork required to transfer ownership.

• What do escrow companies do?
• Hold funds securely in an escrow account.
• Ensure all contract conditions are met before releasing money.
• How much do these fees cost? This varies but can range from $500 to $2,000 depending on your location and provider.

5. Prorated Property Taxes

Property taxes are paid annually, so you’ll need to pay your share up until the closing date.

• How is it calculated? The annual property tax bill is split based on the number of days you owned the home that year.
• Example: If your property taxes are $8,000 per year and you sell halfway through the year, you owe $4,000 in prorated taxes.

6. Homeowners Association (HOA) Fees

If you live in a community with an HOA, expect additional fees at closing.

• Unpaid dues: Any outstanding HOA fees need to be settled before closing.
• Transfer fees: Some HOAs charge $200 to $1,000 just to process the ownership change.

7. Attorney Fees (If Required)

In some areas of the North Shore, hiring a real estate attorney to review and finalize the sale is necessary.

• Cost: Typically $500 to $1,500.
• What do they do?
• Review contracts and closing documents.
• Make sure everything is legally sound.

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 on the North Shore involves more than just finding a buyer. Closing costs can add up, but by knowing what to expect and planning ahead, you can retain more of your profit. Keep these tips in mind, and you’ll move on to your next chapter with confidence.