COSTS YOU MAY INCUR IN SELLING YOUR PROPERTY

Deed of Trust-

The loan that is secured by the property. There can be one or several. This loan or loans can be satisfied either by being paid off at closing or by the purchaser assuming the liability for this loan.

Pre-payment Penalty-

Additional interest assessed by the lender for early payoff of the mortgage. This penalty can be very expensive. Check with your current lender as to whether there is a pre-payment penalty involved with your current mortgage, how much, and if it can be avoided.

Title Insurance Policy-

The seller insures the title he is conveying to the purchaser. The premium adjusts with the purchase price. If your current policy is less than two years old, it can be surrendered to the Title Insurance Company for a 50% savings on the cost of a new policy.

Discounted Mortgage-

The amount a seller receives for a mortgage (usually a second mortgage) that they sell to a third party. This enables the seller to receive most of their money and be relieved of the possibility of the purchaser not paying. The amount received varies based on the terms and conditions of the loan.

Release Fees-

Small cost relevant to the releasing the title from public record Legal Costs-
In all real estate transactions, both buyers and sellers are entitled to legal counsel. When a Real Estate Broker is involved with the sale, the cost of document preparation, the deed, and the cost of closing are covered by the brokerage fee. The respective parties pay any attorney coverage beyond these responsibilities. An attorney will charge according their involvement. The more complex the involvement, the greater the cost.

Escrow Adjustments-

This usually involves the lenders escrow for taxes. The seller is liable for their taxes from January 1st until the date of closing. Lenders historically escrow taxes from April till April. The seller usually has a shortage of funds in escrow to cover their taxes. Adjustments are then made at the time of closing for their shortages.

Mortgage Interest-

Most mortgages are paid in arrears. This means that if you close in July you pay interest owed for the month of June. For this reason, the seller usually owes interest on their loan at the time of closing.

Water Escrow-

Water is a perpetual lien against a property. The escrow at closing assures the property payment of the lien. Any remaining balance of the escrow is refunded to the seller.

Fixture Payoff-

Any fixture, refrigerator, stove, drapes, etc. that is included in the sale of a property must be free and clear of any money owed against it, unless the buyer agrees to assume these liabilities.

Brokerage Fee-

The fee a licensed real estate broker earns for finding a ready, willing and able buyer. This also includes representing the best interest of the seller, marketing the property, and the closing of the sale involving the transfer of real estate.

Home Warranties-

Various insurance companies offer Warranty Services to insure repair or replacement of appliances and various vital home systems. The advantage of this extra coverage is that the seller doesn't pay anything for this coverage until the house sells, unless they have a claim. Should there be a claim, the maximum charge is $35 for each service call. Should the house not sell, the seller pays nothing except the $35 service charge they may have previously paid. For small additional charges, the buyer may elect to cover most other items such as hot tubs, spas, and swimming pools. The benefits of this warranty could far exceed the cost of the policy. For additional information, I can furnish brochures and copies of the warranty contract for your inspection.

Discount Points-

Discount points, or "points", represent additional yield to a lender. One point is equal to 1% of the loan amount. Virtually every loan involves the payment of "points" Lenders do not care who is to pay the points "Points" are a negotiable item between the buyer and the seller. The majority of purchasers know this and will not hesitate to make, as a condition to the purchaser, the requirement that the seller pay part or all of these points. A seller who refuses to consider that payment of part or all of these points as part of the marketing plan, puts themselves at a decisive disadvantage to competing properties. In today's market, prospective buyers are looking for the greatest value of their dollar. To be less than competitive in any aspect of the marketing process would result in a prolonged marketing period with ultimately less "NET" proceeds to the seller.

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