If you are a home seller in Pennsylvania, you must be aware of the closing costs you will likely incur. Many different fees can add up, so it’s important to understand what they are and how much they will cost. In this blog post, we’ll discuss all the closing costs that sellers in Pennsylvania can expect to pay. We will also provide tips on reducing or eliminating some of these costs.
By understanding the different closing costs, you can be better prepared to handle them and ensure that you are getting a good deal on the sale of your property.
What are Closing costs for a seller?
Closing costs for a seller are the fees associated with selling a property. These costs usually include title insurance, transfer taxes, prorated taxes, commission fees to the real estate agents involved in the sale, and other miscellaneous charges.
These costs can vary widely depending on your location and the type of property sold. It’s important to understand what each cost entails so that you can plan to cover the cost or reduce them if possible.
Closing Costs for a Seller in PA
The most common costs in Pennsylvania will include: Transfer Tax, Recording Fees, Title Insurance Costs, Homeowners Association Dues, Real Estate Agent Commissions, Mortgage Payoffs, and Settlement Fees.
Transfer Tax
Transfer taxes are charged by the state of Pennsylvania when a property is transferred from one party to another. These fees vary depending on the county in which you live but typically range from 0.25% to 2%.
Recording Fees
Recording fees are paid for filing documents related to the property transfer. These fees are typically paid by the buyer but can be negotiated to be shared between the buyer and seller.
Title Insurance
Title insurance costs cover any potential title issues that may arise during the sale of your home. These costs vary depending on where you live but typically range from $500-$1000.
Homeowners Association Dues
If your home is part of a Homeowners Association, you will likely be responsible for paying any outstanding dues or assessments at the time of closing.
Real Estate Agent Commissions
The seller typically pays real estate agent commissions which can range from 3-6% of the sales price.
Mortgage Payoffs
If you have a mortgage on your previous home, you will need to pay this off at closing. This amount can vary depending on the balance of your loan.
Settlement Fees
Settlement fees are paid by both the buyer and seller and typically cover services such as legal advice, title searches, and other administrative costs associated with closing.
In addition to these closing costs, sellers in Pennsylvania may also have to pay taxes on any capital gains from the sale of their home. This tax is typically only due if the property has been owned for more than two years and if the gain exceeds $250,000 (for married couples filing jointly).
How much are closing costs in Pennsylvania?
Closing costs typically amount to about 3.87 percent of the sale price of a home in Pennsylvania. You would pay approximately $10,369 for a home worth $267,594 — the median home value in Pennsylvania.
The average closing costs for sellers in Pennsylvania is around 2-3 % of the total sales price, although this figure can vary depending on various factors.
Who Pays The Closing Costs in Pennsylvania?
To complete a home sale, closing costs must be paid by both the buyer and the seller. In Pennsylvania, the seller typically pays the majority of closing costs in Pennsylvania, although some can be shared between the buyer and seller. The fees typically paid by the seller include transfer taxes, recording fees, title insurance, real estate agent commissions, and mortgage payoffs.
How to save on Pennsylvania closing costs
There are a few ways to reduce or eliminate closing costs in Pennsylvania. One way is to negotiate with the buyer to split some fees, such as transfer taxes and recording fees. Additionally, you can shop around for competitive title insurance quotes and try to find an agent who charges lower commissions. Finally, if you have owned your home for more than two years, you may be able to reduce or avoid paying taxes on capital gains.
Closing costs can add up quickly so it is important to familiarize yourself with your options ahead of time. Knowing what closing costs are typical for sellers in Pennsylvania and how to save on them can help ensure a smooth home-selling process. With the right information and careful planning, you can save money and minimize closing stress.
Even though closing costs aren’t usually sellers’ biggest expense in Pennsylvania, here are the best ways to save money:
- Negotiate with your buyers to split the closing costs- transfer taxes, recording fees, and other costs can be shared between the buyer and seller.
- Look for competitive title insurance quotes- it pays to shop around for the best rates on this expense.
- Consider an agent who charges lower commissions- some agents are willing to negotiate a lower commission than what is typical in Pennsylvania.
- Consider the tax implications- if you have owned your home for more than two years, you may be able to avoid paying taxes on capital gains from the sale.
- Take advantage of closing cost credits- some lenders offer closing cost credits which can help to reduce certain costs associated with a real estate transaction.
- Check for state and local tax credits- some states and municipalities offer closing cost credits to help offset the costs associated with selling a home.
- Look into seller assistance programs- many states, counties, and cities offer seller assistance programs which may include discounts on closing costs or other forms of financial assistance.
By being aware of these options and planning, you can save time and money on closing costs in Pennsylvania. With the right information and preparation, you can make your home-selling process smooth.
Closing costs may seem daunting at first, but with the correct information and mindful planning, they don’t have to be.
Other Pennsylvania closing costs for sellers
Other closing costs in Pennsylvania may include repairs, capital gains taxes, and miscellaneous fees. Repairs are typically paid for by the seller unless otherwise negotiated in the agreement. Capital gains taxes may be incurred if the property has been owned for more than two years. Miscellaneous fees such as document preparation or notary services may also be charged to the seller.
You should be prepared for a few unanticipated costs, regardless of your circumstance. Here are a few normal incidental expenses:
- Fees for the homeowner’s association (HOA)
- Mortgage payoff and/or prepayment penalties
- Fees for property appraisals
- Fees for settlement or attorney fees
Using a local expert to sell your home is a great way to save money. Based on the distinctive characteristics of your Pennsylvania neighborhood, knowledgeable realtors in your area will be able to inform you of the fees that should be anticipated.
How To Calculate Closing Costs When Selling A Home
The closing costs associated with selling a home depend on the specifics of your transaction and state laws. To calculate an estimate, you will need to know:
- Home inspection before sale: $400-$800
- Realtors Commissions:5-6%
- Seller Discounts: normally range from 2-5%; however can differ if material.
- Costs of a Lawyer: Recording Fees ranging from $1,000 to $2,000
- $256.75 Tax on Property Transfers
- Total City Cert Reimbursement (property dependent): 4.278% (City) + 1% (PA Commonwealth)
- Title Insurance can range from $500 to more than $5,000, depending on the property’s purchase price.
Additionally, you can anticipate incurring additional costs for the title research and, if necessary, any work required to remove liens, defects, or judgments from the title.
By understanding the closing costs associated with selling a home in Pennsylvania, you can prepare ahead of time and make the process go as smoothly as possible.
Pennsylvania closing costs calculator
The average closing costs for sellers in Pennsylvania can be estimated using a closing cost calculator. Calculator websites such as ClosingCosts.com will provide an estimate based on your home’s sales price and county of residence. Double-check the estimates with your real estate agent before signing any paperwork.
In conclusion, understanding closing costs in Pennsylvania can help make the home-selling process smoother. By familiarizing yourself with all the costs of selling a home, you can budget and plan accordingly. Additionally, there are ways to save money on closing costs such as negotiating with buyers or shopping around for competitive title insurance quotes. With the right information and preparation, you can make the home-selling process stress-free.