Breaking Down The Expenses

Bag Of Money

(This is part of the Selling Grandma’s House series. For the rest of the series, click here)

Turns out, selling a house is more expensive than simply paying a realtor.

The govern­ment has their fees, the realty company has their fees, the buyer has a few requested fees, and there are always a few surprise costs waiting to spring up at the last minute.

I’m not mad about the fees – they all seem reason­able, but I do want to know what my grand­mother is paying. Like most people, I’m ignorant.

The Costs

Here are the fees:

  • Title Insurance - $600. This protects my grand­mother from any title costs that may arise in the future. If something pops up, it’s the insurers problem, not my grandma’s.
  • Florida Docu­men­tary Stamps on Deed - $371. This is a tax Florida adds to the sale of the house. It has to do with the mortgage changing hands. I’m pretty sure this is only in Florida. Other states may have something similar.
  • Recording Fees — $170. These fees are paid to govern­ment agencies for recording the sale of the house in public records. This helps keep the sale of the house legal.
  • Home Warranty – $485. The buyer asked for this, and since she gave us a full offer we agreed. It protects her from wear and tear on the home’s elec­trical appli­ances for the next year.
  • Clearing the House - $300. Since my grand­mother moved into my parents’ house, she doesn’t need 3/4ths of the stuff she use to. It’s been sitting in the house since she left in December and no one seems to want it. We’ve hired a company to come in, collect all that leftover stuff, and throw it away/donate it us for.
  • Termites - $0 — $1,200. The inspec­tion found termites in the home and the buyer wants us to treat the problem before she moves in. It’s a reason­able request so we agreed – espe­cially since my grand­mother has a termite protec­tion plan that covers it for free!
  • Realtor Fee – 6%. I’ll go over the actual numbers of this fee when I talk about the final closing of the house.

Worth It

With over $2,000 dollars in fees, it’s easy to look at this for the first time and get upset, but I’m happy.

These fees are more than worth it. We’ve sold the house in a few days, had an amazing realtor that’s taken care of every­thing, and given my grand­mother the extra boost of money she needs to be set for a long time.

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6 Responses to “Breaking Down The Expenses”

  1. Loren Pinilis March 6, 2012 at 1:41 PM #

    Do those fees vary from state to state based on laws? Or are they pretty universal?

    • Alex March 7, 2012 at 9:47 AM #

      From what I can tell, there are certain fees (like Title insurance and regu­la­tory fees) that are in every state. But some states are wonky (Florida, Texas, and Cali­fornia being the wonkiest). It’s always best to talk to a relator about what fees will be involved in selling your home.

      Also, the big things I’ve learned is taking into consid­er­a­tion all the little things like canceling the security system, fumi­gating the house, and paying to have my grand­mother moved. While these aren’t neces­sarily “direct expenses”, they do take money from the final sale price.

  2. Mike Luna March 6, 2012 at 6:22 PM #

    That’s a lot of little stuff. I guess everybody’s got to get their cut, right?

    Still, the $2000 isn’t all that much consid­ering how much you got to begin with.

    • Alex March 7, 2012 at 9:48 AM #

      Yeah, the biggest hit comes out of the realtor’s fee. Though, she’s been worth every penny!

  3. ixnayonthetimmay March 9, 2012 at 3:17 AM #

    Thanks for sharing the fee breakdown. You just reminded me of an aspect of the home­buying process that I appar­ently blocked from my memory when I bought my shack.

    It’s pretty normal for a buyer to get a home warranty unless (I imagine) the place was built recently.

    The recording fees are pretty normal, but I also recall various assess­ment and inspec­tion fees, plus a few nominal $10-$50 legal-like fees. You’re right about the wonkiness of the Florida house-transfer tax; I don’t recall such a thing existing here in Arizona.

    Buying a property in Texas seems fraught with tax peril. As Texas has no state income tax, I just assumed it was made up for in higher property taxes. A friend of mine and I have a theory about the effect that had on house prices in Texas during the recent boom and bust.

    • Alex March 9, 2012 at 12:39 PM #

      Some of those fees (legal fees, inspec­tion fees, etc) were paid by the buyer. We did an “as is” sale.

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