What are "Hidden Fees" When Selling a House?

When some homeowners begin to think about selling, they anticipate making a nice profit with plenty to put down on their next home — particularly in today’s seller’s market. However, many sellers don’t realize that there are hidden fees when selling a house and that those fees are deducted from the purchase price. 

To avoid disappointment at closing, it helps to know what fees you can expect to pay before even putting your home on the market. That way, you’ll have a realistic budget for buying your next home.

7 Seller Fees You Can Expect to Pay

On top of obvious costs that are involved when selling a house such as minor repairs, painting, improving landscaping, staging the home, and moving costs. But there are other fees that homeowners aren’t always aware of when putting a house up for sale

Inspection Fees

Buyers typically pay for a home inspection after making an offer. But unless you plan to sell your house as is, you may want to hire a home inspector prior to putting your home on the market. This will give you a list of repairs needed in order to pass a buyer’s inspection, and can also justify a higher asking price since positive inspection results can show that it’s a problem-free home. The cost for a seller’s inspection is typically around $350.

Real Estate Commission

Working with a seller’s agent offers a variety of advantages, including having someone in your corner who can price your home competitively, knows how to attract buyers, and negotiates the purchase price. Your buyer may also have an agent whom they’ve hired to find the perfect home and negotiate on their end. Typically, both the seller agent and the buyer agent will earn a commission from the sale, which is a percentage of the sale price. Different agents might charge different percentages, though the commission is always negotiable. While the commission might seem like you are receiving less for your house, good agents more than earn their commissions by getting you the best price for your house, and in a reasonable time frame.

Transfer Taxes

While Missouri does not impose taxes on the transfer of real estate property titles, the state of Illinois does. Transfer taxes are typically paid by sellers at a rate of $0.50 per $500, or $500 per $100,000 of property value. On a $300,000 sale, that means $1,500 will go towards transferring the title to your buyer. 

Recording Fees

Separate from transfer taxes, state and local agencies charge a fee for registering the administrative paperwork of a sale. The amount charged varies by county and by the number of pages included in a deed. In St. Louis County, for instance, the recording fee is $24 for the first page and $3 for each additional page.

Title Search Fees

Before closing a real estate transaction, title companies investigate the property’s public records to verify its owner and make sure there aren’t any outstanding liens. The title search is usually paid for by the seller and can cost between $75 – $200.

By Image-Source purchased from Envato Elements

Prorated Property Taxes

Sellers must pay property taxes for the time they owned the home during the year they sold it. So if you owned your house for three months after your last tax bill, you will owe 1/4 of annual property taxes at closing. Since this amount can add up to a substantial amount, it’s one of the largest hidden fees when selling a house.

HOA Fees

It’s usually not a big deal if you get behind on Homeowners Association payments while living in the home. However, most HOAs require that homeowners pay all unpaid fees before the closing of a sale within their neighborhood. The amount of seller fees will depend on the cost of HOA membership, which can range from $100 per year to $100 per month or more.

A Knowledgeable Realtor Can Make You Aware of Hidden Fees When Selling a House

Moving can cause a lot of stress; being blindsided by unexpected costs doesn’t have to add to it. An agent at Berkshire Hathaway HomeServices Select Properties will explain all of the seller fees you will need to pay at closing, so you’ll have a realistic expectation of your bottom line right from the start. 

Cover Image by Andy_Dean_Photog purchased on Envato Elements

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