Typical Seller Closing Costs

Closing Costs Demystified

When you decide to sell your home it is a good idea to know exactly what you are going to walk away with from the closing table. Real Estate surprises are seldom fun; and, sellers in Massachusetts so often get hit with a nasty one. As a REALTOR® for 30+ years, Jim finds the constant need to remind sellers about the tax due on selling a home in the Commonwealth.

So, you know that the sale price of your home minus your mortgage balance will give you an approximate idea of what to expect; however, there are a number of other closing costs entailed when selling a home. If you are a first-time seller or have not sold a home in a long time, it is not surprising if you do not understand what the term, "closing costs” means, what closing costs include, who pays for them and how much they will be?

Closing costs are expenses and/or monetary adjustments, over and above the purchase price of the property, incurred by sellers in transferring ownership of a property, at the time of the actual "closing". In order to ensure that a closing goes smoothly, a seller should always try to understand and become well acquainted with the various closing costs associated with their side of the transaction, as well as not hesitate to ask their attorney and/or broker any questions pertaining to any aspect of the transaction. Buyers and sellers have separate closing costs associated with a transaction.

The seller's usual closing expenses are:

  • Real estate broker's commission: typically 5%-6% and split equally between agencies.
  • Since brokers’ commission fees are negotiable, you can see fees as high as 7% or much lower depending upon individual circumstances. Boston area sellers enjoy low fees, as a rule, typically only 5%.

  • Attorney's fees: $850-1500.00.
  • Some States, like Texas and Missouri, close at title company offices and the title company and its attorneys handle all the closing details. Massachusetts, however, is known as an attorney state and attorneys handle all the closing details and title searches themselves. Their fees depend upon the time involved and the issues that may arise throughout this process.

  • Massachusetts tax transfer stamps: currently $4.56 per thousand of the selling price plus $10 - $20 document fee.
  • This tax is levied on the sale of any home sold in the Commonwealth of Massachusetts. Since the tax rate is $4.56 dollars per thousand, if you sell a home for $400,000 your tax would be $4.56 x 400 for a total cost of $1824. When you have certain expectations for the proceeds coming from your closing, a short fall of $1824 would not be a pleasant surprise. See the National Conference of State Legislatures to verify your tax rate. Sadly, this can be the largest expense you might face when selling in Massachusetts, aside from paying a real estate agent's commission.

  • Condominium Association Trust Documents, Master Deed and Rules & Regulations.
  • If you do not have the all of the documents in your possession that were given you when you bought your condominium along with all of the amendments passed in the intervening time, you should only incur photo copying fees for this.

  • Registry of Deeds recording costs: $300.00-500.00
  • Fees depend upon the number/type of documents being recorded. Select the county in which your property is registered for its current schedule of fees: Norfolk, Suffolk, Middlesex.

  • Condominium 6D and Master Insurance Certificates: + $100.00
  • When purchasing a condominium unit, by law, a 6D certificate must be issued before you can close. The 6D assures that all condo fees and outstanding special assessments have been paid by the current owner as of the date of closing.

  • Other Expenses prior to closing: $50 - $1000.
  • The buyer of your property will have your place inspected for radon, mold, termites, and building defects. Unexpected repair costs might arise from these inspections. Additionally, there are Massachusetts mandated inspections which can be costly to have done and even more costly to remedy plus any resulting predicated repairs. These items are addressed here.