You’ve been waiting for this day for ages. After tons of ups and downs, oodles of offers, and more heartache than you thought possible, you finally found a decent buyer. Everything is going well, but then you hear about a term that you aren’t familiar with: seller costs. What gives? Why are you being charged something?
New Jersey has a number of fees that come with selling a home. Homeowners who are looking to sell need to be aware of them and ideally plan ahead. Here’s what you should be aware of.
Why Do Sellers Have Closing Costs?
Closing costs are a blanket term for a number of costs that are incurred during the home’s sale. This includes, but is not limited to:
- Title Searches
- Recording Fees
- Home Appraisals
- Credit Reports
- Writing Fees
- Mortgage Payoffs/Lien Payoffs
- Survey Fees
- NJ Exit Tax
- Title Insurance
These fees are generally only covered by sellers. However, there are exceptions to the rule, and we’re going to cover those later.
Do Selling Costs Include The Realtor Commission Fees?
Believe it or not, seller costs do not involve realtor commission fees. This is a fee that you will need to pay on top of your fees. They also happen to be one of the biggest costs incurred in your sale.
Do Sellers Always Have To Pay Closing Costs?
It depends on the deal that the buyer has offered you. If you live in a very in-demand property, there is a chance that they may be willing to pay the seller closing costs as well.
However, that would have to be written in your offer and it also would have to pass muster with your real estate lawyer. In most cases, you will not be able to get a buyer who will agree to this.
What Are Typical Seller Closing Costs In New Jersey?
Seller closing costs are extremely pricey in New Jersey, and it’s actually a major issue for many sellers.
- Seller closing costs can range from anywhere from 1 to 7 percent of your home price.
- However, most sellers will have around 1 to 3 percent of their home price in closing costs.
- Buyers should expect to pay between 2 to 3 percent of the home price in their share of closing costs.
How Can You Decrease Seller Closing Costs?
This is actually harder than it may appear to be, especially if you had a hard time moving the home off the market. Here’s what you can do:
- Choose appraisers, surveyors, and inspectors that are affordable. It’s totally okay to ask for a price quote. In fact, your real estate agent might know a couple you should use.
- Negotiate with your buyers. Some buyers are open to cover all or a portion of the seller closing costs. This is especially true in high-competition areas.
- Ask your real estate agent for advice. This might seem cliche, but real estate agents often know ways to make the process easier for you.
- Use an affordable real estate attorney. A typical real estate attorney will cost around $2 per $1000 of your home’s price. In some cases, you might be able to get a more affordable lawyer.
What Is The NJ Mansion Tax?
The NJ Mansion Tax is a special tax placed on homes above $1 million, to the tune of 1 percent. It is (thankfully) not a part of seller closing costs, and buyers are expected to cover this.
What Is The NJ Exit Tax?
The NJ Exit Tax is often misconstrued as the Mansion Tax, but it’s quite different. The Exit Tax is a tax that all home sellers must pay to the state. The Exit Tax will be about 2 percent of the sales price.
However, there is something we want to point out. This is not an extra tax. It’s the same thing that you’d be paying in April.
How Can You Predict Seller Closing Costs?
A good way to ballpark your closing costs is to figure out how much 1, 2, and 3 percent of all your home’s value would be. From there, you can try to figure out which percentage you’ll be closer to by checking out the local taxes in your city.
Once you know the local taxes, you can add in the fees that you already have been quoted—such as the survey or appraisal of your home. If you had multiple appraisals, you might have a higher fee than most.
Hire A Real Estate Agent Who Gets It
It’s no secret. New Jersey is an expensive state when it comes to real estate, and having help makes all the difference. When you need someone who can help you maximize your real estate sale, it’s time to call a qualified firm. Give us a call today!