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How Do You Sell a Home Safely During the COVID-19 Crisis? Here Are the Steps To Take

April 14, 2020

How Do You Sell a Home Safely During the COVID-19 Crisis? Here Are the Steps To Take

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Selling a home can be a headache. It often takes longer and costs more than you think, and it can be an emotional drain. That’s in normal times. Selling a home during a pandemic will add a slew of new safety concerns to the mix.

But even during the COVID-19 crisis, real estate transactions are moving forward. The U.S. Department of Homeland Security recently classified real estate as an essential service, although local laws might affect what’s allowed and might ban certain activities like open houses. (Be sure to check what’s OK in your area.) Suffice it to say, many sellers are still listing their homes, and buyers are still buying, too.

Yet selling a home during a pandemic is new for everyone. And we’re here to offer guidance through our series “Home Selling in the Age of Coronavirus.”

This second installment of the series offers insight into how sellers and real estate agents are adapting to the COVID-19 outbreak to make selling a home as safe as possible. Here’s an overview of some of the new processes.

Virtual showings could be the new norm

“Selling a home during a pandemic or uncertain market definitely left some of our sellers unsure on what they want to do,” says Ressie Krabacher, a residential broker with the Chicago Home Partner team of At Properties. “We do have sellers who do need to sell now, and we have implemented safety protocols and plan to take the necessary precautions to protect them.”

For instance? Eye-catching photos and video have long been a must for any home listing, but that’s more important than ever now, since so many people are sheltering in place at home and likely house hunting online. These days, sellers are taking their listings up a notch by offering virtual tours of their homes to drive interest among buyers and provide a more in-depth glimpse of the property.

“Sellers love virtual tours because typically what would be the inconvenience of leaving the residence for 20 to 30 minutes to allow potential buyers access now have the opportunity to allow them access without having to leave,” says Michelle Mumoli, CEO of the Mumoli Group, a residential and commercial sales and leasing firm in Hoboken, NJ.

Doing a virtual tour reduces the number of in-person visits to only those who are truly interested, says Angela Hornburg, team leader at the Hornburg Real Estate Group in Dallas.

“We are using virtual tours to pre-qualify interest to ensure that potential buyers don’t tour a home and say they didn’t like the flooring in person or something small like that,” Hornburg says.

Agents are taking extra precautions for in-person showings

Open houses with large groups of people are mostly canceled for now, but many buyers still want to view a home in person before making an offer. Sellers, however, may worry about having strangers in their homes. So, in places where face-to-face showings are still happening, real estate agents are taking some extra steps to protect homeowners and only allowing them in on a case-by-case basis.

“This is not a time for looky-loos,” says Mumoli, who is limiting in-person showings to buyers with loan pre-approval letters.

Along with a pre-approval, Hornburg says she makes sure the potential buyer has viewed the virtual home tour and the seller’s property disclosure statement before being allowed in.

“We also have delivered ‘showing kits’ to our listings that contain sanitizer, booties, and gloves for people to use during the showing,” Hornburg says.

Before a home showing, she advises sellers to clean and disinfect high-touch areas, like countertops and doorknobs, and to leave lights on and doors, closets, and cabinets open to limit what visitors need to touch. And, put a sign on the front door requesting people viewing the home to take off their shoes.

Also, make hand sanitizer and soap available with signs encouraging hand-washing. Once the showing is over, clean and disinfect thoroughly to lower your exposure risk to whatever the buyers may have brought in with them.

Inspections and appraisals may not need in-person contact

Home sellers usually have to allow the home buyer’s inspectors and appraisers into their homes before the real estate deal can go forward. But, these days, social distancing orders are allowing many inspections and appraisals to be done with minimal contact.

National home inspection company HomeMaster, for instance, now asks sellers to stay secluded in part of the home away from the inspector. Inspectors are also following the Centers for Disease Control and Prevention guidelines, with buyers wearing booties, masks, and gloves, and sellers wiping down everything with disinfectant wipes when the potential buyers leave.

If the lender allows it, appraisals can be done by driving by the home, or viewing photos of the property, so the appraiser never has to set foot in the home. So be sure to ask whether such options are acceptable in your area.

A remote closing may be possible

Remote home closings have been an option for buyers and sellers in some states even before the COVID-19 crisis. But, there’s a push to expand this practice nationwide.

Currently, 23 states have remote online notarization policies, allowing a notary and signer to execute electronic documents while in different physical locations. The National Association of Realtors® recently sent a letter to Congress asking lawmakers to expand the policies nationally to make real estate transactions safer and easier during the pandemic.

The ability to close remotely also depends on the buyer’s lender, and some don’t have the technology to offer a fully virtual closing or work with buyers in states that don’t allow them, says Tendayi Kapfidze, chief economist at LendingTree.

“This is definitely a hot topic right now,” he says. “Most lenders are working toward trying to make this happen, lobbying to get laws in place to allow this, and focusing on how they can make mobile closings with notaries more safe.”

If remote closing is possible, title companies prepare the required documents and mail, and then email or upload them to a portal. The title company verifies personal information and identification by video, and the documents are signed electronically.

Another option is using a mobile notary, who travels to a buyer or seller’s home or workplace to complete the closing to limit in-person contact, Hornburg says.

“We’ve had one done this way so far and saw the notary wearing a mask, booties, gloves, and she opened up new pen packs for the sellers to sign with,” she says. “They also sat 6 feet apart.”

Social distancing is also affecting in-person closings. To limit contact, only the parties signing are allowed at the closing these days, says Maggie Wells, a real estate agent with Keller Williams Realty Greater Lexington in Kentucky. Closings are starting to be delayed because people are limiting in-person contact and working from home.

Selling a home during the pandemic is an adjustment for everyone, but Wells says buyers, sellers, and agents are working together to make transactions run as smoothly as possible.

“I’m not sugarcoating anything or making guarantees to sellers,” she says. “I just let them know everyone is taking every precaution possible.”

The post How Do You Sell a Home Safely During the COVID-19 Crisis? Here Are the Steps To Take appeared first on Real Estate News & Insights | realtor.com®.

Closing Costs for Sellers: Common Fees Associated With Selling Your Home

September 14, 2019

closing cost for sellers

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If you’re monitoring the value of your home so you can sell it and reap a worthwhile profit, don’t forget to factor in the closing costs for sellers into the sale price.

You may be estimating that your sale price could be $350,000, which could pay off your $200,000 home loan and reap you a $150,000 profit. But before you start counting your dollars and debating the size of the down payment for your next home, you need to calculate the closing costs for the seller.

While buyers also pay closing costs (here’s more info on typical closing costs for buyers), you’ll see a long column on the HUD-1 Settlement Statement for seller closing costs.

Closing costs for sellers of real estate vary according to where you live, but as the seller you can expect to pay anywhere from 6% to 10% of the home’s sales price in closing costs at settlement. This won’t be cash out of the seller’s pocket; rather it will be deducted from the profit on your home—unless you are selling with very low equity on your mortgage. In this case, sellers may need to bring a little cash to the table to satisfy your lender—and some closing costs may be held in escrow.

1. Seller costs

One of the larger closing costs for sellers at settlement is the commission for the real estate agents involved in the real estate transaction.

Commissions on real estate are negotiable and vary somewhat by market, but a typical commission is 6% of the sales price of the home split between the listing real estate agent and the buyer’s agent.

For a $350,000 purchase price, the real estate agent’s commission would come to $21,000. Buyers have the advantage of relying on sellers to pay real estate agent commissions.

2. Loan payoff costs

Most home sellers often seek out a sales price for their home that will pay off their mortgage and satisfy their lenders.

Your mortgage payoff balance will often be a little higher than the remaining balance on your mortgage and even the buyer’s purchase price. This is because of lenders’ prorated interest on the mortgage.

In some cases, your lender may require you to pay a prepayment penalty for paying off your mortgage loan before the end of the term. If you have a home equity loan or line of credit, in addition to your mortgage, the lender will require this be paid in full at settlement as part of closing costs for the seller.

Be sure to talk to your lender about what will be required to pay off the mortgage so that you get an accurate picture of closing costs.

3. Transfer taxes or recording fees

Transfer taxes, recording fees, and property taxes are key parts of a seller’s closing costs.

Transfer taxes are the taxes imposed by your state or local government to transfer the title from the seller to the buyer. Transfer taxes are part of the closing costs for sellers.

Along with transfer taxes and transfer feeds, property taxes must also be up to date for sellers before they hand over keys to the buyer.

4. Title insurance fees

Title insurance fees are another fee to keep in mind when you sell real estate. As part of closing costs, sellers typically pay the buyer’s title insurance premium. Title insurance protects buyers and lenders in case there are problems with the title in a real estate deal.

5. Attorney fees

If you have your own attorney represent you at the settlement of your real estate sale, the seller may have to pay attorney fees as part of closing costs.

Market traditions vary, so while in some areas both the buyers and sellers have their own attorneys, in others it’s more common to have one settlement attorney for the real estate transaction. In some areas the buyer pays the attorney fees, while in others the seller pays.

Additional closing costs for sellers

Additional closing costs for sellers of real estate include liens or judgments against the property; unpaid homeowners association dues; prorated property taxes; escrow fees; and homeowners association dues included up to the settlement date. These closing costs for a home sale are separate from what buyers pay at closing.

Depending on the real estate contract, closing costs may also include termite inspection and remediation, if necessary; home warranty premium for buyers; and repair bills or a credit to buyers for repairs for items found during a home inspection.

Also, don’t forget to estimate some of the closing costs associated with preparing to sell, such as cosmetic repairs or improvements to make your home more attractive to buyers. Those closing costs may be returned with a higher sales price, but you should still include them in your calculations.

The post Closing Costs for Sellers: Common Fees Associated With Selling Your Home appeared first on Real Estate News & Insights | realtor.com®.