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Who Pays for What When on the Sale of a Home?

Real estate deals have many moving parts. One of the negotiations that take place is who pays for the various fees, taxes and insurance during and after escrow are an important part of every deal. While there is an expectation from both buyers and sellers on who pays for what, this can vary on the individual deal. However, varying from the standard expectation can cause a deal to fall apart and may not yield the expected result. This is why there always needs to be an important, valid and understandable reason for varying from the standard set.

Here is the standard set of responsibilities from both buyers and sellers on who pays for what:

Seller’s financial responsibilities

  • Real estate commission
  • Document preparation fee for deed
  • Documentary transfer tax
  • Any city transfer/conveyance tax (according to contract)
  • Any loan fees required by buyer’s lender
  • Payoff all loans in seller’s name (or existing loan balance if being assumed by buyer)
  • Interest accrued to lender being paid off, statement fees, reconveyance fees if any prepayment penalties
  • Termite inspection (according to contract)
  • Termite work (according to contract)
  • Home warranty (according to contract)
  • Any judgments, tax liens, etc., against the seller
  • Tax proration (for any taxes unpaid at time of transfer of title)
  • Any unpaid homeowner’s dues
  • Recording charges to clear all documents of record against seller
  • Any bonds or assessments (according to contract)
  • Any and all delinquent taxes
  • Notary fees
  • Escrow fees (according to contract)
  • Title insurance premium (according to contract)

Buyer’s financial responsibilities

  • Title insurance premium (according to contract)
  • Escrow fees (according to contract)
  • Notary fees
  • Recording charges for all documents in buyer’s names
  • Inspection fees (roofing, property inspection, geological, etc.)
  • Termite inspection (according to contract)
  • Home warranty (according to contract)
  • Fire insurance premium for first year
  • Tax proration (from date of acquisition)
  • City transfer / conveyance tax (according to contract)
  • Homeowner’s transfer fee
  • All new loan charges (except those required by lender for seller to pay)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Assumption / change of records fees for takeover of existing loan (if applicable)
  • Beneficiary statement fee for assumption of existing loan
Knowing who pays for items in a home sale is important to both buyers and sellers.

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