What is seller closing cost when selling your home in Arizona?
When you sell your home in Phoenix AZ, there are fee a associate with selling your home. One of the larger cost of selling home in Phoenix AZ is commission to be paid to Realtors that involved in the transaction. Other than Realtor’s commission, here is a list of estimate for your reference and should in no way be held as the true and actual cost.
Realtor’s commission
How much are commissions? You may ask. In Arizona, Realtor’s commission is 100% negotiable and will vary depending on experience, location, agency and others. Typically 6% – 3% for Listing Agent – represent the seller and another 3% for Buyer Agent – represent the buyer.
For example, the average price of a home today in Phoenix is around $250,000, if the commission to sell this home were 6% for example, you would pay $15,500 total in commission. Out of the $15,500 commission, $7,500 will be paid to listing agent and the remaining $7,500 to buyer agent.
Outstanding loan balance
All outstanding loan balance under seller’s name must be paid off. This include all the remaining balance and prorated interest. If your loan has prepayment penalty for paying off your loan before end of the term, you need to pay the penalty. If you have home equity loan or line of credit (HELOC), you also need to pay in full at settlement.
Escrow fees
This include escrow fees, transfer tax or recording fees, title insurance and others.
– Escrow fees. Fee associate for the transaction by escrow company. The fee may vary by company, but for our example, it is $500
– Transfer tax or recording fees. These are tax and fees imposed by state and local government. It is about $50
– Title insurance. In Arizona, seller typically pay the owner’s title insurance premium for buyer. It is about $3.00 – $7.00 per $1,000 of appraised value
HOA fees
If you home is has Homeowner Association, there are some fees seller has to pay. Arizona law requires seller shall pay all HOA disclosure fees. Depending on the negotiated contract, buyer may ask seller to pay HOA transfer fees, capital improvement fees and others. Seller will also pay prorated HOA fees.
Property tax
Depending on what time of the year you sell your home, if you are current on your property taxes you may have pay prorated property tax or you may get some credited back to you. This varies on every home sale.
Other fees
Other fees that seller may pay are cost home warranty, seller paid concession and others. All these fees are part of the negotiation between buyer and seller.
What is seller paid closing cost?
In Arizona, if Seller is selling home to a VA Buyer, there will be additional fees involve. Seller has to pay VA Buyer’s Termite Inspection, Document Preparation fee, HOA Transfer & Disclosure fee and others.
Closing Cost Who Pays What in Phoenix Arizona
So, how much is total seller closing cost?
For home seller, the closing cost typically range between 1 – 2% of the sale price and these seller closing cost are paid at the settlement. Typically these won’t be cash out of your pocket, rather it will be deducted from the profit on your home, unless you are selling with low or no equity. In this case, you will need to bring cash to the table.
You might be interested:
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