What Closing Costs does the Buyer and Seller Pay?

Couple meeting financial advisor

Couple meeting financial advisorThe real estate market provides huge profit potential for sellers, as long as the seller takes the right approach. According to the 2016 National Association of REALTORS Profile of Home Buyers and Sellers, 51% of homebuyers will use the Internet to find their ideal home, whereas 34% will use the services of a real estate agent. The remaining percentage of buyers will make an investment move after seeing a yard sign, hearing about the real estate listing from a family/neighbor/relative, or will know the seller directly.

No matter how you intend on attracting a buyer (if you are a seller) or searching for the ideal home (if you are a buyer), it is important that you are aware of the fees involved once a selling price has been determined. Unless you understand what the typical closing cost includes, there is a chance you may be left surprised with unexpected costs.

Familiarize yourself with the process of closing a real estate transaction to eliminate surprise once the home ownership is shifted from the seller to the buyer.

Typical Buyer’s Closing Costs

  • The Down Payment - This is the initial payment a buyer will make to reserve the home. A larger down payment means reduced loan interest, so aim to put down as much as possible.
  • Loan Fees – A lender will assess your credit score and charge a fee to process the loan application.
  • Prepaid Interest - When daily interest builds on your loan, this must be paid at the time of closing. Once again, the amount depends on your credit report and financial situation.
  • Inspection Fees – A property inspector will charge this fee to assess the condition of the property. This service is valuable since it aids the buyer in making a final decision.
  • Appraisal - The fee charged by a qualified appraiser to determine a property’s market value.
  • Mortgage Insurance – Should a mortgage loan default, mortgage insurance will cover it.
  • Hazard Insurance – Damage caused by Mother Nature, vandalism, theft, or unintentional circumstances can be repaired, with costs covered by this insurance policy.
  • Title Insurance – A kind of indemnity insurance that shields a buyer and lender if the seller is unable to transfer home ownership.
  • Documentary Stamps - Documents that transfer real estate interest must be stamped, so that the excise tax can be imposed properly.

Typical Seller’s Closing Costs

  • Broker’s Commission – Every realtor will charge a different percentage of commission on the final property sale value. This will be deducted at the time of purchase.
  • Transfer Taxes – Consider this a transaction fee for transferring home ownership from you to the buyer.
  • Documentary Stamps on the Deed - This is a tax on documents detailing the transfer, sale, acceptance, or loan agreement for a property.
  • Title insurance – Indemnity insurance is equally as important for the seller to pay, as it is for the buyer.
  • Property Taxes – Property expenses must be divided fairly to ensure the buyer is only paying from the moment he/she claims home ownership. This is guaranteed when property taxes (a proration) are paid.

Calculating the closing costs prior to making a property purchase or agreeing to a sale will ensure you are satisfied with the outcome. Use the Internet to your advantage at this time, by estimating the costs with an online calculator. A few influential factors include the condition of the house, its size, and the features (interior and exterior).

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Tips to Get Your House Ready to Sell this Summer

Nice curb appeal of American craftsman style house.

Nice curb appeal of American craftsman style house.Is it time to relocate and begin making memories in a new house? If so, consider putting your property on the market this summer. Not only will you be able to present your home in the best possible way but competition won’t be as fierce in the warmer months. Real estate investors will see your house in a different light if it goes on the market when Mother Nature is looking her best. With better moving conditions and children out of school for the summer, there really is no better time to present your property to potential buyers.

The stages of selling property involve setting your sale price and staging the home to give it that lived-in look. The sooner your potential buyers can envision themselves settling into the place that you once called “home”, the faster you can expect to make a sale. Furthermore, you can guarantee that the offers you receive will be higher if you focus on enhancing curb appeal.

In order to accomplish this, your real estate game needs to be on point. Take a moment to enlighten yourself on the top tips to get your house ready to sell this summer:

  • Clean Entire Home – Put yourself in the shoes of a buyer and think about what you would expect when you are looking around a property of interest for the very first time. Cleanliness is a must! You can’t cut corners when it comes to dusting, sweeping, mopping, and everything in-between. Some buyers can be more particular than others, so put a bit of elbow grease into it and make your property sparkle!
  • Get Rid of Any Clutter – Not only will a de-clutter clear your mind, it will also give the illusion of a bigger space. You should leave some furniture in place to paint a picture of a “home”. Too much clutter will can distract the potential buyer and make the space feel cramped.
  • Take Care of Landscaping – The garden and grounds on which your property stands are the first thing a potential buyer will see. Maintain the area well with professional landscaping services or, if you have time, cut the lawn, remove weeds, and trim foliage to ensure your property is a sure-fire seller.
  • Fresh Air and Sweet Scents – Don’t forget about setting the mood with the right aroma. An incense stick, air freshener, or scented candle that smells of lavender or chamomile will instill a feeling of calm. The more relaxed the potential buyer is, the easier it will be for them to imagine themselves living in the property. Open the windows and scatter bowls of baking soda around the home to absorb foul smells.

Don’t underestimate the importance of “staging” your home for a sale. Consider keeping decor simplistic, so as not to distract from the overall design of the property, from its flooring to its ceilings. Professional home staging services might come in handy if you don’t consider yourself much of an interior designer!

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Life Hacks Designed to Make Moving Easier

Moving can be a nightmare. The longer you’ve been in your current place, the more things you’ve acquired, which need to be packed up, loaded into trucks, and unpacked. There are heavy items, fragile items, important items that can’t get stuck in a box for any length of time, and much more. What can you do to make the whole process easier? Here are a few life hacks to get you through without as much stress and hassle.

Keeping vs. Discarding

Before packing everything up, go through all of your stuff and decide what you really need when you move, and what you can do without. The complete set of your favorite TV series on DVD is probably something you’ll want to keep. But Grandma’s old 25-volume set of Funk & Wagnall’s Encyclopedia can probably be thrown away. (more…)

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How to Find a Trustworthy Moving Company

Paramount Equity® - moving company

Moving Companies - Paramount Equity® Imagine, if you will, you’re moving into a new home and are just waiting on the movers to arrive with all of your furniture and personal belongings. Time passes and everything you intended to fill your new home with is nowhere to be found, then you find out the movers that you hired are holding it hostage for a large fee. For most, this scenario seems like something out of a nightmare, but it could happen to anyone. If you’re going to be moving and are searching for a moving company, it could be wise to take steps now to find a moving company that is trustworthy.

Do Your Research

First and foremost before hiring anyone to move your furniture and personal belongings, it is critical to do the research. As with any profession, there are some scams hiding in the moving industry waiting for an opportunity to pounce on unsuspecting and innocent (more…)

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Making the Best of Moving Day

Paramount Equity® - moving day

Making the best of moving - Paramount Equity®Let’s face it, no one likes moving. Whether moving across town or across the ocean, moving is a task that’s not easily tackled. Making the best of moving day can often be solved by not doing something that we all tend to do on a daily basis: procrastinate.

That’s right, don’t procrastinate! It’s best to plan days, weeks, or even months in advance of your moving date. Think of these tips as your “how to move homes 101” guide:

Organize Your Items

Designating one room in your house to use for your move is a great way to get organized. Make sure you organize all of your items and pack them early into boxes. Then, on moving day, you only need to load the truck, and then you’re off! (more…)

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How to Sell Your Home Fast

Paramount Equity® - Sell your home

How to sell your home fastWhen you are getting ready to sell your home, one of the first things you want to know is, “What can I do to make it sell fast?” The answer is simple. Make your house attractive to buyers. Here are three ways to do just that:

1. Curb Appeal

The first impression a potential buyer gets of your house is how it looks from the curb. The outside appearance can make the difference in whether they even want to come inside or not. Make them want to see the inside.

To Do:

Mow the grass and trim the landscaping. Keep the toys off the sidewalk and the litter off the lawn. (more…)

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Preparing to Sell your Home

"For sale" real estate sign

"For sale" real estate signWhen selling your home, there are many things to do in order to sell it right. There is the financial aspect to selling a home and then there are the aesthetics of selling a home. When you have a checklist of things you need to do before you sell your home, you will be more prepared to make this a smooth process.

Selling Your Home: Preparing Your Finances

Selling your home is a big undertaking. Pricing the home will help it move on the market. You should have an appraisal performed to see how much the home is worth and how it compares to the rest of the neighborhood.

If you want to get more from your home than what the initial appraisal is, consider making some upgrades. (more…)

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Tips for Homebuyers Looking for Homes Online

looking for homes online - Paramount Equity®

If you have put off the inevitable of having to settle down and buy a home, it would be something of an understatement to say anything less than, the time is now. You can get into the market for a new home and really begin to make a lifetime of new memories for you and your family. Conversely, if you have always thought about relocating to somewhere you have never lived before and the opportunity is before you, that’s great! But you could be off-put by the prospect of buying a home sight-unseen. Luckily for you, with all the resources available to consumers, it’s never been easier to do so. Here are some tips for homebuyers looking for homes online and how you can move right in to your dream property.

Survey the Area: You may have a job in one place and not want to commute too far from that job but you need to carefully survey the region to decide if the trade-offs are worth it. For example, if one home you’re looking at is (more…)

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