Closing Costs For Sale by Owner in Maryland…Who Pays for What?
Have you thought about selling your own Maryland house “For Sale by Owner”? If so, there are Maryland fees you must pay. Those fees are called “closing costs”. It doesn’t matter whether you want to sell your house on your own or sell it with a REALTOR®, you’ll have closing costs to pay either way. What are the closing costs in Maryland for a seller? What are the For Sale by Owner costs you’ll have to pay? Keep reading so you don’t end up being blindsided!
Some homeowners want to try and sell their own house. Their #1 goal is to save money by doing it themselves. Homeowners who sell their house “For Sale by Owner” are often surprised to learn there are “For Sale by Owner” costs they will need to pay anyway, including commission, which is the one big ticket item they want to avoid.
Closing is what happens when a house is sold and ownership changes. Closing costs can vary from one home sale to another. That’s because the terms of sales contracts can vary. Let’s talk about the most common for sale by owner fees you’ll have to pay when selling your own house without a REALTOR®.
*How Much Are Closing Costs in MD?*
The typical closing costs on a house when selling with a REALTOR® can range from about 8% – 10% of the sales price. FSBO costs can be less, OR they can even end up being more! How is that possible?
When you aren’t represented by a REALTOR®, it can be tough to negotiate on your own behalf, and it can be tough to understand all the terms and deadlines in your contract. A REALTOR® who is representing and working with a buyer will make sure their BUYER is the one getting a deal on your house. They won’t care that they could end up costing YOU more money than if you had listed your house with a REALTOR®. You could be at a HUGE disadvantage. Let’s break down the closing costs into the different categories of things you’ll be paying for as a seller.
*Closing Costs in Maryland for Seller*
If you’re still making mortgage payments on your house, there will be a fee to pay off your loan. If you want your proceeds wired to a bank account, you will be charged a fee for that wire. If you don’t want to pay for your profits to be wired, you can always get a check instead. However, you won’t have immediate access to the money you made on your house. Your bank will likely put a hold on that check for a few days, and you’ll have to wait for the check to clear.
Government Recording & Transfer Charges
Unless other arrangements have been agreed upon, government fees are typically divided evenly between buyers and sellers in Maryland. These are simply the taxes and charges to change ownership and record the new deed in the public records.
The actual cost of these fees will vary based on the sales prices and area in which the property is located. Sometimes, buyers will ask sellers to pay the full amount of the the recording and transfer charges, instead of sharing them equally. Your sales contract will spell out whether you’re paying half or the full amount.
Title Company Fees
Buyers in Maryland select the title company that will research the title to your house and conduct the settlement, and there are fees for their services. What fees are you, as the seller, responsible for paying to the title company? You may be charged a fee for them to conduct the closing. This varies from one tittle company to another.
Who Pays REALTOR® Fees For Sale by Owner?
Since you’re selling your house “For Sale by Owner, you obviously won’t be paying a listing commission, you’re saving yourself that expense. But, there’s a very good chance the buyer of your house will be working with a buyer’s agent. That agent will be a REALTOR® who is licensed in Maryland, and will expect to get paid for providing you with your buyer.
You will need to agree to pay a commission to that buyer’s agent in order for you to sell your house. That commission is how the real estate company AND the REALTOR® involved in the sale of house, get paid. After all, they are doing all the work to bring you a buyer for your house.
“Other” Closing Costs
If your buyer is using the VA loan to buy your house, you will be required to pay for THEIR termite inspection. The VA loan does NOT allow buyers to pay for it.
If you’re providing a home warranty to your buyer, your “other” closing costs will include payment of that home warranty as part of your closing costs.
If you’re crediting any money to your buyers, such as seller help towards their closing costs, or money in lieu of making certain repairs, that money will become part of your closing costs, and will be deducted from your proceeds.
Unpaid Bills Related to Selling Your House
If you have any bills that need to be paid in regards to selling your house…for example, paying off a lien or paying for any contractor repairs that are still due…that money will be collected as part of your closing costs and will also be deducted from you proceeds.
*Calculate Your Closing Costs*
By now you might be asking yourself “How do I know what my actual closing costs will be?” There’s no magical, standard formula. But, you can go online and find a few “Closing Cost Calculators”, that will estimate your closing costs. Your total fees will be based on the terms of your sales contract. Keep in mind, those calculators provide estimates, because certain factors can change as you go through the “For Sale by Owner” process. But, you’ll have a pretty close idea of what to expect.
When Melissa Spittel is the listing agent, she uses a reliable “Closing Costs Calculator ” to assist all of her clients. It not only estimates their closing costs, but also how much they can expect to profit from the sale of their house. Again, it’s an estimate, but they always have a pretty close idea of what to expect, and how much money they will make from the sale of their house.
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About the Author:
Melissa Spittel is a local real estate expert who serves Carroll County and the surrounding areas in Maryland. Her knowledge, skills and experience are invaluable when it comes to buying or selling a house. Her experience working with out-of-state buyers and sellers makes her a great relocation REALTOR®, and she is part of Coldwell Banker’s Relocation Team. Do you need a real estate expert in another part of Maryland? Or even in another state? Melissa can easily connect you with a REALTOR® from her wide network of real estate pros.