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What expenses can I expect when selling my property?

Who pays what expenses in a real estate transaction can always be negotiated, but generally you should subtract the following to come up with your net proceeds:

 

1.  Commission – this is something you can negotiate with your agent, but is generally 5-8%.  6% is probably the most common amount.  This amount is split between your listing agent and the agent who represents the buyers.

2.  Title Insurance – in Colorado the seller generally pays to provide title insurance for the buyer.  This amount is based on the purchase price and varies from provider to provider.

3.  Transfer tax/fee – some properties have a transfer tax or a transfer fee that is assessed when the ownership changes.  The town of Crested Butte, for example, has a 3% transfer tax based on the purchase price.  Generally this tax is split between buyer and seller.

4.  Closing costs – the title company who completes the closing charges a fee to do their work – this is usually no more than $400.  There are also expenses associated with shipping documents, recording fees and document preparation fees.  These usually are no more than $300.

5.  Misc. costs – I always like to add $500 – $1,000 in costs as a cushion.  When you are deciding how to respond to an offer, it is important to know your bottom line and I would rather err on the high side.

 

I am happy to prepare a spreadsheet for you that would give you this information based on a variety of sales prices and allow us to manipulate various scenarios.

Posted in: Seller FAQ