Guide to Closing Costs: What to Know BEFORE Selling a Home

If you’re thinking about selling your home, you’ve come to the right place. At Felix Homes, we’re here to cover everything you need to know before you put it on the market. We'll let you in on the trade secrets with the goal of empowering you so that you can get the highest price for your home in the shortest amount of time.

One of the most common questions we get at Felix Homes is how much are closing costs and who pays for them? Before we dive into who pays what, it’s important to go over what closing costs are. Closing costs are simply the upfront fees that are associated with closing a real estate transaction.

What Closing Costs Do Sellers Typically Pay

Let’s say you just sold your house for $500,000. We all know that you won’t necessarily walk away with that amount and in most cases, nothing even close to it. Here is a list of closing fees that a seller typically pays:

1. State Property Taxes (Prorated)

The seller is responsible for any state property taxes that were accumulated between their last payment and the closing day.

2. HOA Fees and Transfer Fees (Prorated)

The seller is responsible for any HOA Fees that were accumulated up to the closing day. Additionally, depending on the details of the purchase contract and the HOA, the seller may also need to pay a fee to their HOA to transfer the property to the buyer.

3. Title Fees

The seller typically pays a title company to do a comprehensive title search and transfer the title over to the buyer. Additionally, Sellers will also handle the new owner’s title insurance, which protects them in case there are any issues with leans against the property. Many title companies also handle the escrow account for the transaction, which they’ll include in their fee to the seller.

4. Realtors’ commission

This is where you’ll be able to save mega-$$$ with Felix Homes. The home seller is responsible for any fees charged by the real estate agents involved in the home sale. This includes both the listing agent and the buyer’s agent. In most cases, this is usually around 6% of the sales price (3% to the listing agent and 3% to the buyer’s agent) which for a $500,000 home is $30,000! At Felix Homes, we’ve done away with the 6% commission. Instead, we charge a 1.5% commission on the listing side and we still encourage our clients to offer a buyer’s agent a 3% commission so they are incentivized to bring their clients to your listing. Our 1.5% model saves the average homeowner over $15,000 in Realtor commissions!

5. Real Estate Transfer Tax

This varies from state to state but in Tennessee, the current deed transfer tax is $0.37 per every $100 of the sales price. So for a $500,000 home, the transfer tax would cost the seller $1,850.

About Felix Homes

Felix Homes is where five-star service meets low commissions! To date, we've saved our clients $1,610,738 in commission fees and have earned 120 five-star reviews on Google!

How are we able to offer five-star service AND lower commission fees? It's simple:

• We're an independently owned brokerage – not a franchise which allows us to keep more of the commission we earn.
• By offering a lower commission, more folks want to work with us which means we close more deals. By closing more deals, we can pass more savings along to our customers!

Still not convinced? Read all about our low-commission mission here.

If you have any questions about the state of the market or the home buying/selling process, please feel free to contact us at contact@felixhomes.com or 615-354-5731.