When purchasing your new home, it is wise to have a general idea how long you plan on living in the home. In addition, you need to provide yourself financial protection for unexpected emergencies, such as, loss of job or illness. Finally, it is important to understand the cost associated with selling a home; unfortunately many home buyers do not understand this side of the equation or fail to take it into consideration when purchasing property. Recently, many buyers of homes have experience the need to sell their home for various reasons, but unfortunately they do not have sufficient equity in their home, or available cash to go the closing table. This leads to foreclosure, bankruptcy, and destroying their credit rating. As a buyer, you need to be aware of the cost associated with selling your home. Your closing costs are going to be approximately 8-9% of the sold price. In addition, to the closing costs the seller must pay off any outstanding mortgage amounts and pro-rated property taxes. The closing costs usually include the following:
• Title insurance; protect the buyer so the title to the property is free of liens and encumbrances.
• Some areas it is customary the seller pays for pest inspections.
• On VA, FHA and conventional loans discount points may be paid by seller, but usually paid by buyer.
• Attorney, courier and other miscellaneous fees
• Property taxes and insurance premiums are usually collect in advance by your mortgage company. Seller's pro-rated property taxes are collect at closing. After closing the seller can recoup any unused insurance premiums and property taxes from their mortgage company.
• Broker's fees.
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