If you bought your real estate in Lake Havasu a couple of years ago, you might be sitting on a hefty bit of equity right about now. As prices continue to rise in the Havasu real estate market, that equity looks better and better. Maybe you considered cashing in on it by selling your property. If owe $225,000 on your home right now and sell it for $310,000, that means you should expect to receive $85,000 at the end of a sale, right? Hold on a minute. You forgot to deduct your closing costs from your home sale profits. And that can add up to a chunk of change.
Closing Costs and Home Sale Profits
Real Estate Commissions
Seller pay the commissions for the real estate agents involved in a the sale of your real estate in Lake Havasu. While the amount can be negotiable, you usually pay about 6% of the sale price in commissions. And that comes out of your closing settlement, thus reducing your profit by 6% for this closing cost alone. But that’s not the only cost you incur.
Transfer Taxes/Recording Fees
It costs money to transfer the title out of your name and into the buyer’s name. The government may impose a transfer tax when this happens, too. In Arizona, that only costs a few bucks.
Your mortgage statement usually includes your balance, current payment, and due date. Unfortunately, the mortgage balance and payoff amounts are not the same. It might cost you a little bit more to pay off the mortgage loan on your real estate in Lake Havasu. Typically, the mortgage company also needs to calculate prorated interest. Some companies also charge a penalty fee when you pay off your mortgage early. Plus, if you took out a HELOC (Home Equity Line Of Credit), that must be paid off in full before ownership can be transferred to the buyer.
It is customary for a seller of the real estate in Lake Havasu to pay the title insurance premium for the buyer. That may run about $1000 or so, depending on the title insurance company.
If you utilize an attorney to represent you at closing, their fee will come out of your settlement. You don’t have to hire an attorney if you don’t want, though. So, this cost is totally optional.
Overall, your closing costs run between 6% and 10% of the sale price of your real estate in Lake Havasu. On a $310,000 home, that can range anywhere from $18,600 to $31,000. That’s quite a cut into your initial $85,000 profit margin. Just keep this in mind when calculating what to expect to receive at the end of a home sale so you’re not surprised.
Alexis Steel – 928-303-2199
Keller Williams Arizona Living Realty
Search homes at: www.TheHavasuHome.com