Understanding Closing Costs for Home Sellers in the Valley

Understanding Closing Costs When Selling Your Home

Selling a home is exciting, but it comes with expenses that can catch you off guard if your real estate agent hasn't taken the time to walk you through them. Picture this: you’re at the closing table, anticipating a nice profit, only to see thousands of dollars nibbled away by various fees - this isn't the way we want things to end. Closing costs are real, and if you don’t plan for them, they can take a hefty chunk out of your earnings - but if you plan ahead, there will be absolutely no surprises.

In this post, we’ll break down the typical costs sellers face, why they’re there, and how you can keep more of your money when you’re selling a property in the Valley.

What Are Closing Costs?

Closing costs are the final expenses you pay to complete the sale of your home. They cover everything from real estate transactions to title transfers and legal fees. In general, sellers in the Valley can expect to pay about 6% to 12% of the home’s sale price in closing costs.

Being aware of these costs ahead of time can help you budget properly and avoid last-minute hiccups with closing.

The Most Common Closing Costs for Home Sellers

1. Real Estate Professional Fees for Service

Real estate compensation remain a key expense for many sellers, but recent changes have made them more flexible. Sellers are no longer required to decide ahead of listing their property how much they will provide to the buyer to cover the buyer’s fiduciary agent, and all compensation agreements must be clearly disclosed and agreed upon upfront. At the Amy Jones Group, this is how we've always done business, but for others - it is bringing up the professional standard here in the Valley and giving our sellers a little more room to negotiate once an offer comes in.

How Much Are Real Estate Professional Fees for Service?

Traditionally, compensation rates ranged from 6% to 8% of the sale price and we haven't seen that change - although just as it has always been, these fees vary greatly depending on the real estate agent, their experience, their service offerings, and the expectations of both client care and outcomes.

Who Pays the Real Estate Professional Fees for Service?

• Sellers may still choose to pay the buyer’s agent some compensationand most of our clients still do. It is all dependent on the offer they receive, really - and the market. We recommend our clients look at negotiating that fee in the same way that they do any other requests for incentives for the buyer to move forward with purchasing their home.ul>
• Some buyers may be responsible for paying some or all of their own agent’s fee for service which is why we talk about that fee during our initial buyer strategy session and discuss what would be most helpful to our buyers in terms of getting support with out of pocket costs of buying a home in the Valley.ul>
• Some listing agents charge a fee for marketing, negotiations, and transaction management as ad on services - but at the Amy Jones Group, our fee for service is structured in an easy to understand all inclusive way.

2. Transfer Fees and Recording Fees

There are a variety of fees charged by both the title and escrow company as well as the Home Owners Association and State Tax governing body - all of which you'll see on the settlement statement. We work with a trusted title and escrow company that can give us an estimate of these fees up front but usually we're looking at 0.5% to 2% of the sale price including title insurance and prorated property taxes. Who pays these fees? In many states, including our own, the seller generally covers these costs, but buyers may sometimes share the burden depending on the agreement.

3. Title Insurance (Owner’s Policy)

Title insurance protects buyers from ownership disputes or legal claims on the property. While buyers typically purchase their own policy, many sellers opt to cover the owner’s title policy as a good faith gesture.

• What do escrow companies do?
• Hold funds in a secure account.
• Ensure all terms of the contract are met before money exchanges hands.

4. Prorated Property Taxes

Since property taxes are paid twice a year and in arrears, you will need to pay your share up until the closing date.

• How is it calculated? The total property tax bill is split based on the number of days you owned the home that period.
• Example: If property taxes are $6,000 per year and you sell halfway through the year, you will owe somewhere around $3,000 in prorated taxes. This calculation is done by the title company and is included in your fees at closing.

5. Homeowners Association (HOA) Fees

If your home is in an HOA, expect extra fees at closing.

• Unpaid dues: Any outstanding HOA fees must be settled before closing as will any HOA disputes.
• Transfer fees: Some HOAs in the Valley charge a fee to process the ownership change and others charge one time fees at closing for future improvements to the neighborhood.

How to Reduce Your Closing Costs

Closing costs can take a sizable chunk out of your home sale profits, but the good news is that there are ways to cut back on these expenses. Whether through negotiation, strategic choices, or finding cost-effective service providers, you have options to keep more money in your pocket. Here are some practical ways to lower your closing costs as a seller.

1. Sell Without an Agent (FSBO) — this means no listing agent commission. However, you’ll still need to:

• Pay the buyer’s agent commission (usually 3% to 5%).
• Handle marketing, negotiations, and paperwork yourself.

FSBO works best if you have experience in real estate or a buyer already lined up.

2. Ask the Buyer to Cover Some Costs

• In some deals, buyers agree to cover certain closing costs instead of negotiating a lower sale price.
• This works best in a seller’s market, where buyers compete for homes.

3. Shop Around for Service Providers

• Get multiple quotes for title insurance, escrow services, and attorneys.
• Some companies offer discounts for bundled services.

Preparing for Closing

As you approach the finish line of your home sale, there are still a few final steps to take before closing day. Proper preparation can help avoid last-minute surprises and ensure everything goes smoothly. Here’s what you need to do before handing over the keys.

1. Review the Closing Disclosure Early

• You’ll get a Closing Disclosure a few days before closing that lists all costs.
• Review it carefully to catch any unexpected charges.

2. Finalize Repairs and Paperwork

• Complete any agreed-upon repairs before closing.

3. Make sure liens, HOA fees, and taxes are paid to avoid delays.

Final Thoughts

Selling a home involves more than finding a buyer. Closing costs can add up quickly, but by knowing what to expect and planning ahead, you can keep more of your profit. Like most money making ventures, the way to keep more of your money is to make more up front which is why pricing, staging, preparing the home and having the best negotiator on your side who can commit the time, energy and expertise to getting your home sold - will get you started on the right foot.