Selling a house is not an easy task even in the best of markets. I am often asked What Are Closing Costs When Selling A Home in Phoenix? What are closing costs in Chandler? What are closing costs in Tempe? Also, what are closing costs in Gilbert? You may want to use a Mortgage Calculator to estimate your closing costs when selling a house in Arizona.
What is the housing market doing in August 2020 – See these metro Phoenix area market reports. As of August 8, 2020, Phoenix metro prices are up 11.1% over the past year!
- 😊 PHOENIX AUGUST 2020 Market Report
- 🏡 GILBERT AUGUST 2020 Market Report
- 😊 TEMPE AUGUST 2020 MARKET REPORT
- 🏡 CHANDLER AUGUST 2020 MARKET REPORT
- ❓ ❓ How Much Does it Cost to Sell a house in Phoenix Arizona?
- 🙋 How much are closing costs for sellers in the Phoenix metro area?
- 🙋 Show me a House Sale Profit Calculator?
- ☂️ What is the Average Rainfall for Phoenix?
- ❓ ❓ How long does it take to close on a house?
- 🤑 Do I need a lawyer at house closing?
- ❓ ❓ Who pays for the closing attorney?
- 🧑💼 How Much is a Lawyer for a House Closing?
- 🙋 Do You Pay Closing Costs on a For Sale By Owner?
- ❓ Are Closing Costs and Realtor Fees the Same Thing?
- 🤑 What is the Largest Closing Cost?
- 🤑 How Much are Real Estate Commissions in Arizona?
- 🚙 What is a Courier Fee?
- ❓ ❓ What is a Closing?
- 🤑 Who Pays Closing Costs in Arizona and What Are The Average Closing Costs?
- 🙋Are Home Inspections Included in Closing Costs?
- ❓ Can I Negotiate Closing Costs and Why Should Sellers Pay Closing?
- 💲 How to Get Closing Costs Waived?
- ❓ How Much Are Closing Costs For Sellers in Arizona?
- 📜 Are recording fees part of closing costs?
- ❓ Is escrow Expense considered a closing cost?
- 💲 What are Examples of Seller Closing Costs in Arizona?
- ❓ Is it Normal for the Seller to pay Closing Costs?
- 🏡 What are the Costs Associated With Selling a Home?
- 📚 Are the Closing Costs More For The Buyer Or Seller?
- 🌡️ What are the Average Temperatures in the Phoenix Metro area?
- 💲 What is the average cost of a home in Arizona?
- 🧾 What is the Foreign Investment in Real Property Tax Act (FIRPTA)?
- 💲 How can I lower my closing costs as a seller?
- ❓ Why do I Have to Pay Money to my HOA?
- 🙋 Can You Sell a House With A HOA Violation?
- 🏡 What are Real Estate Agent Fees for Sellers?
- ❓ What Happens to Money My Lender has in my Escrow Account?
- 💲 Should You Consider a Discount Brokerage?
- ⚖️ Do I Pay For an Attorney in Arizona Real Estate?
- 💲 How do I avoid Seller Expense When Selling Investments?
- 📚 Who Pays For Title Insurance in Arizona?
- 💲 Who pays Escrow Fees? Buyer or Seller?
- Are you Selling a home AND buying a Home?
- 💲 How does Seller Loan Payoff work?
- 💵 What are other Lender Fees?
- ⚖️ What is a Home Warranty for Sellers?
- 💲 What are Home Owner Transfer Fees?
- 💲 Who pays Transfer Tax in Arizona?
- 📘 What are Seller Disclosure Fees?
- 💲 Who pays Outstanding HOA Dues?
- 🚘 What are the Courier Fees?
- 💲 When are Closing Costs paid?
- ❓ What Percentage Are Closing Costs in Arizona?
- 🏗️ Who Pays Capital improvement Fees?
- ❓ What is a Settlement Statement?
- 💲 What Other Home Seller Costs Should Sellers Consider?
- 🖩 Instant Home Value Estimator
Keep in mind that a buyer may ask the seller to contribute towards buyer closing costs. This may be a dollar amount or a percentage of the sales price. Sellers should understand their closing costs plus any additional seller concessions they agreed to when anticipating their net proceeds.
When selling a home in the Phoenix area, be sure to hire a great Real Estate Agent to help you get the most money for your home. Not all agents are created equally! Be sure you understand how to get your home ready to sell!
❓ ❓ How Much Does it Cost to Sell a house in Phoenix Arizona?
There are several costs to sell a house. Some can be negotiated, such as real estate commissions, title fees, etc. Your mortgage pay-off and taxes are not negotiable. A buyer ad seller can negotiate on a few real estate related fees. If there is a Home Owner Association (HOA), there are usually HOA transfer fees that can be paid by the buyer, seller, or split between the two. Some buyers will ask for seller help towards their closing costs. Sellers can decline to pay any closing costs. Below you will find most of the costs associated with selling a house in Arizona.
🙋 How much are closing costs for sellers in the Phoenix metro area?
Some closing costs can be negotiated between the buyer and seller and some can not. In Arizona, some title companies may “bundle” their fees into one lump sum, while others identify each charge individually. While closing costs are state and community-specific, if you are buying in the surrounding areas of Tempe, Mesa, Gilbert, or Chandler your fees may vary.
Part of closing costs also includes any unpaid property tax. Different cities may have different taxes to collect. Also, If you have a Home Owner’s Association (HOA) your fees may vary.
Closing costs usually fall into three categories:
- Fees charged by the sellers current lender for loan pay off – Interest is charged in arrears, so there will be additional interest to pay off. Any owed HOA dues, and any HOA fines not paid, HOA fees to provide the buyer the community Covenants, Conditions, and Restrictions (CCRs), and agreed upon HOA transfer fees.
- Third-party fees – Title agency fees, Title insurance policy for the buyer, real estate commissions
- Property Taxes – You will need to pay your property tax through the last day you own the house.
🙋 Show me a House Sale Profit Calculator?
Sellers always want to know how much their net profit will be on the sale of a property. There are several things to keep in mind a seller much pay when selling a house. I am often asked, how do you calculate proceeds from sales? Or, how much do I need to sell my house to break even?
This net proceeds calculator will help identify the major selling costs. Keep in mind your HOA may also have required fees, such as Seller disclosure feeds to provide your buyer the rules of the community (CRRs), there may be transfer fees, or even HOA violations to be cleared. Find out your net proceeds on your home sale with this calculator. This calculator will help guide you through the selling expenses to give you a good idea of your net proceeds.
☂️ What is the Average Rainfall for Phoenix?
The driest month in Phoenix is June with 0.09 inches of precipitation, and with 1.07 inches March is the wettest month.
❓ ❓ How long does it take to close on a house?
In Arizona, we typically see a 30 day closing. Buyers and sellers agree to a closing date in the purchase contract. If a buyer is paying with cash, a closing can be quicker since there is no lender involved. Buyers do need to plan time to do a home inspection.
And, they need to allow sellers to respond if they are asking for repairs to be completed. Also, if the home is located within a Home Owner’s Association (HOA), they have 10 days to provide the HOA demand letter for the title company.
This letter will identify any HOA violations to be remedied before closing. They also need to send the buyers the CCRs for the community. If the house is vacant, a seller may be asking for a 30 day or less closing. Also, if the buyer is getting a loan after the repairs are negotiated, the lender will order an appraisal. Depending on the appraiser’s workload, it could be a week to just get the appraisal scheduled!
🤑 Do I need a lawyer at house closing?
In Arizona, lawyers are not a required part of the transaction. However, any person wanting their purchase contract or sales contract reviewed by a lawyer can certainly do so. The state of Arizona uses standardize documents. These documents are issued and updated by the Arizona Department of Real Estate. The language in these documents has been carefully written to ensure the rights of a buyer or seller. Title searches in Arizona are conducted by the title companies. In other states, the attorneys complete a title search.
❓ ❓ Who pays for the closing attorney?
If a buyer or seller would like to involve an attorney in a sale or purchase, the person retaining the attorney would pay for their services.
🧑💼 How Much is a Lawyer for a House Closing?
🙋 Do You Pay Closing Costs on a For Sale By Owner?
Yes, closing costs are the cost of selling or buying a home. For Sale By Owner will still have some costs. Typically a For Sale By Owner will use a title company to handle the legal aspects of the sale and ensure their loan is paid off, HOA fee expenses are paid and other liens to the property are cleared at the closing. Sellers also need to bring their property taxes current at the time of sale. If the For Sale by Owner has agreed to pay commission to an agent bringing a buyer, that would be paid at closing. What a For Sale By Owner does not pay at closing is typically a commission to a listing real estate agent as they are representing themselves.
❓ Are Closing Costs and Realtor Fees the Same Thing?
Realtor fees are part of the closing costs a seller will pay at closing. The real estate commission will be collected by the title company and deducted from the seller proceeds.
💲 What are Average Closing Costs for Sellers in Arizona?
Seller closing costs typically are about 1% of the sales price. Also, seller fees typically consist of title and escrow fees, commissions, unpaid taxes, HOA disclosure and transfer fees, and buyer’s title insurance policy.
🤑 What is the Largest Closing Cost?
When sellers look at all the costs to sell their house, typically the largest about they see on their settlement statement is the payoff of their mortgage. While this isn’t a “cost” of sale, it is a debt that is paid at closing. This would include any 2nd mortgagee or HELOC on the property. This must be paid before the transfer of ownership.
🤑 How Much are Real Estate Commissions in Arizona?
In Arizona, sellers typically pay real estate commissions. Also, this listing paperwork states the total commission to be charged. Additionally, this listing agreement also states how much of the commission will be paid to an agent who brings the buyer as well as the amount for the listing agent. Real Estate commissions in Arizona are negotiable. While one may typically see an agent offering 5%, 6%, or 7% (or some other number) in their listing presentation, it is still a negotiable number.
🚙 What is a Courier Fee?
A courier fee occurs when the title company needs to overnight your loan pay off funds to your mortgage company. This document is time-sensitive and needs to get to your lender(s) as soon as possible. If there is more than one loan on the property, there will be more than one courtier fee charged to the seller.
You may also be interested in Instant Buyers (iBuyers) in Phoenix.
❓ ❓ What is a Closing?
In Arizona, the “Closing” is when the ownership of property transfers from the seller to the buyer. There are several aspects of this transfer. The buyer and seller need to sign their closing documents. For sellers, this is signing specific documents to relinquish ownership. For buyers, this is providing their closing funds to the Title and Escrow company. if the buyer is getting a loan the also sign their loan documents. The buyers’ lender will wire the loan amount to the Title and Escrow company.
The title company ensures all parties have signed the appropriate documents and the total funds needed to close the transaction have been received. Once this happens, the Title or Escrow company will release the sale to record with the County. Once the county has recorded the sale, the ownership has transferred. In Arizona, the day of closing is the day ownership transfers, and the day the buyers receive the keys to the house. In Arizona, the date for the “closing” is the day on the purchase contract that the buyer and seller have agreed to.
🤑 Who Pays Closing Costs in Arizona and What Are The Average Closing Costs?
Al buyers and sellers in Arizona will have closing costs when buying or selling property. And, typically the buyer and seller will pay their own closing costs. Buyers will typically have costs associated with their loans. Additionally, these can include lender loan origination fees, processing fees, underwriting fees, etc. Both sellers and buyers will have fees charged by the Title Company. Buyers may also have to prepay a couple of months of HOA fees.
The title company is the neutral third party that holds the earnest money, initiates communication with a Homeowner’s Association (HOA) to get the applicable fees (if the Home is in an HOA community). Also, the title company initiates a title search of the property to ensure the seller has a clear title to pass on to the buyer.
The title company is checking for any liens against the property. Liens could include all mortgages, tax liens, mechanical liens (ie a contractor can place a lien on a property if they are not paid for work performed, such as remodeling). All liens need to be paid in full by the seller when the sale closes.
🙋Are Home Inspections Included in Closing Costs?
Most home inspectors ask for full payment prior to an inspection or at the time of the home inspection. The buyers may decide after reviewing the inspection report that they do not want to proceed with the home sale. In that case, there would not be closing. Home inspection companies can bill their services to the buyer or selling to be paid at closing. However, since doing a home inspection is not a guarantee of a house sale, few will wait for their money.
❓ Can I Negotiate Closing Costs and Why Should Sellers Pay Closing?
There are some seller closing costs are not negotiable.
Sellers typically have to pay any taxes owed on the property since their last tax payment. If there is an HOA, they may have to pay a fee for the HOA to provide the buyer with the rules (CCRs) of the new community.
Another fee sellers will need to pay is a title insurance policy for the buyer. This policy guarantees the buyer clear title to the property. Should any title issue arise, the title insurance policy will take care of the buyer. We have insurance for damage to our homes or cars.
If the buyer and seller agree in the purchase contract that the seller will help with closing costs, this dollar amount is written in the purchase offer. Some buyers have enough money for a down payment but need a little extra help for their closing costs. Sometimes buyers want to reserve their cash for immediate improvements to the property or initial appliance purchase.
💲 How to Get Closing Costs Waived?
Closing costs include several things that can not be waived. Property taxes owed can not be waived. Some title companies will give a seller an investor rate if they own multiple properties. Ask your title company if you qualify for any discounts they may have available. Sellers also pay a portion of the recording fees so the sale of the property gets recorded with the county. Again, the county wants to be paid for their recording service. Most HOAs charge the seller a disclosure fee to give the community rules (CCRs) to the buyer. Again, the HOA wants to be paid for their service and will not waive this fee.
Title companies file their rates with the state of Arizona. If a seller goes to the title company to sign their closing documents, they may not have to pay for a notary to come to their location. Most title officers are also notaries and can sign official closing documents.
❓ How Much Are Closing Costs For Sellers in Arizona?
At closing, sellers will need to pay off their mortgage, if any. Sellers will pay realtor commissions, any taxes due from the last payment to the closing date. Sellers will also have title fees for their portion of the work performed by the title company. Title fees are based on the price of the property. If the home is in an HOA community, sellers in Arizona are required to bay for their HOA to provide the community rules (CCRs) to the buyers. If the sellers have agreed to pay any buyer closing costs, those would be paid from the seller proceeds at closing.
📜 Are recording fees part of closing costs?
Yes, there is a fee charged by the county to record the sale of the property. This records the legal transfer of ownership from the seller to the buyer. The recording fees are typically split between buyer and seller. Recording fees can range from $30 – $60, depending on the fee charged by the title company for this service.
❓ Is escrow Expense considered a closing cost?
The cost for the title company or escrow company to handle the sale is considered a closing costs. The title company is a neutral third party that holds the funds for the transaction, initiates a title search on the property to identify they liens on a property. They also send information to a Home Owner Association ( if there is one in the transaction) to confirm HOA fees due from the buyer and/or seller. The title company also receives the funds from the buyer for the down payment and closing costs. Also, they received the wire for the buyer’s loan.
Additionally, they will disburse funds from the sale to the agents involved. They pay off any liens or monies to the HOA. The title company al will pay off a seller’s loan (if any) send proceeds to the seller ad record the transaction with the county. The title company will send the final closing packages to the buyer and seller.
💲 What are Examples of Seller Closing Costs in Arizona?
Here are some sample fees based on the sale of a $275,000 home in the Phoenix area. Costs will vary depending on the fees charged by a Home Owner’s Association (HOA). Additionally, the seller’s loan payoff (if any) will vary by seller. The HOA closing costs will vary by community. For example, a Chandler or Gilbert HOA may charge an HOA transfer fee and those fees can vary by HOA. There are some HOAs in Phoenix (ie Ahwatukee) that do not have a transfer fee.
When a home is sold, there are closing costs associated with the sale. Seller Closing costs will be charged whether you use a Real Estate Agent or sell the house yourself.
❓ Is it Normal for the Seller to pay Closing Costs?
It is common for sellers to pay their own closing costs. There are times when a buyer will ask a seller to help with THEIR closing costs. What does it mean when a seller pays closing costs? We typically see this in properties under $350,000. Some first-time buyers have their down payment but not enough saved for closing costs.
There are also Down Payment Assistance loans where sellers may be asked to help pay closing costs. However, why would a seller do this? Whether the seller contributes, ie $3000 towards buyer closing costs or accepts an offer $3000 lower, they have the same net proceeds.
🏡 What are the Costs Associated With Selling a Home?
My clients often ask about costs to sell a home. There are the obvious expenses, such as paying off a mortgage, taxes, and real estate commissions. Sellers also need to look at the cost to get their house ready for the market. We know sellers will get a higher price for their home when it shows well. And showing well includes a CLEAN home, shinny clean windows, great curb appeal, a welcoming front door, a well-manicured landscape, and a home in good repair. Buyers are put off by dirt and clutter. You want the home to show light and bright!
After a home inspection, buyers have an opportunity to ask the seller to make repairs that may have surfaced in the home inspection. There may be cracked or broken roof tiles or mortar caps. There could be plumbing or electrical items needing attention. The cost to make these repairs are part of seller costs when selling a home.
📚 Are the Closing Costs More For The Buyer Or Seller?
Buyers and sellers both have closing costs. Buyers getting a loan have loan fees associated with the loan. These fees are in addition to prepaid homeowner insurance and property taxes. Buyers will also buy a title policy for their lender (if obtaining a loan). Seller fees are associated with the sale of the property, and include real estate commissions, bringing property taxes current, HOA disclosure fees, and title fees to name a few. Both buyers and sellers have fees associated with their portion of the transaction.
🌡️ What are the Average Temperatures in the Phoenix Metro area?
Phoenix’s coldest month is January when the average temperature overnight is 43.4°F. In July, the warmest month, the average day time temperature rises to 104.2°F.
If you would like to see specific homes as they come on the market, click here to get email updates.
💲 What is the average cost of a home in Arizona?
As of July 8, 2020, the average price of a home in the Phoenix area was $310,000. The Phoenix metro area is 14,600 Square miles. That is a pretty huge area and includes many different price points. There are areas like Scottsdale where you will pay much more. Also, there are outlying areas where you will pay less.
Most home buyers will have costs associated with their purchase. These are dollars they need to bring to the final closing of the purchase. Buyers often ask what their costs will be to buy a home in Arizona. The real answer is, it depends. Buyers typically have a down payment, a home inspection and termite inspection, appraisals, lender costs, prepaid homeowner insurance, and title and escrow fees.
Often, buyers will have money for a down payment but will ask the seller for closing cost assistance. We typically see this in properties under $400,000. Often first time buyers will have money for a down payment but need help for some of their closing costs. If a seller agrees to help the buyer with closing costs, this is paid on behalf of the buyer, by the seller from their proceeds at closing. The closing cost assistance is either a percentage of the purchase price or a flat dollar amount. The closing cost assistance is negotiated by the buyer and seller in the purchase contract.
🧾 What is the Foreign Investment in Real Property Tax Act (FIRPTA)?
FIRPTA is a Real Estate Transfer Tax for Foreign Sellers. Here in Arizona we most often see this with our Canadian friends when selling a home. The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) authorized the United States to tax foreign persons, on the sale of United States real property interests. This withholding tax is collected at the closing of the sale. This amounts to 10% of the purchase price if the sale is over $300,000. For sales less than $300,000, provided the buyer occupies the residence at least 50% of the time, there is no tax collected. This is why real estate agents may see a note in a listing that the buyer must occupy the property at least 6 months fo the year.
The problem comes when the seller is a foreign person and the property is subject to FIRPTA but no tax is collected. In this case, the buyer can be held liable for the tax.
💲 How can I lower my closing costs as a seller?
If you are selling a property within five years of purchasing it, ask your title company for any discounts to the seller’s title insurance policy. Also, many title companies will charge reduced title fees rates to investors. Another way to reduce expenses is to sign in person at the title company, rather than using a mobile notary. (If the seller is out of state, this typically is not an option.)
❓ Why do I Have to Pay Money to my HOA?
Home Owner Associations (HOA) have a set list of fees that are charged to the community. Some fees are seller specific and some may be buyer-specific. In Arizona, Sellers are required to pay for the cost of their HOA to send a new buyer the CCRs (Covenant, Conditions & Restrictions) of the community. This document gives the buyer the rules of the community.
Individual communities may have restrictions on pets, parking, building paint colors, etc. The buy has an opportunity to read through the rules. Buyers can call the HOA for any clarifications. If a buyer finds they are unable to abide by the rules, they can cancel their purchase offer and walk away from the purchase (if canceled per the purchase contract timeframe).
Also, many HOA communities will drive by a property once they are notified of a purchase contract. They will document any HOA violation and this violation will need to be addressed before closing. An example may be not enough trees or plants, unapproved paint color, damaged fence or gate, etc. If there are any outstanding fines for the property, if not paid, those would be paid at closing.
🙋 Can You Sell a House With A HOA Violation?
The simple answer is yes. Once a buyer and seller go under contract, the title company sends a notification to the HOA the property will be sold. The HOA then provides the title company with the financial information needed for the sale. This is called an HOA Demand letter. The HOA will note any seller disclosure fees to be paid by the seller.
Also, they will provide information on any HOA transfer fees, capital improvement fees or other fees to be collected at closing, Additionally, the HOA will typically have someone drive by the property to look for any HOA violations. These could include a house needing painting or painted an unapproved color. Additionally, they will look at the lot itself. Is there an unacceptable number of weeds in the yard? Does the HOA require a minimum number of bushes or trees, and the property owner needs to add some?. Is a visible gate is disrepair? Is the exterior fence damaged?
There are a couple of options to resolve items noted in the HOA Demand letter:
- The seller can make the noted repairs
- The buyer can assume responsibility by accepting responsibility in writing
- A Seller can give a buyer credit towards remedying the noted items as a credit towards the buyer closing costs
In any of the above scenarios, the HOA will either have the noted items addressed to their satisfaction OR know the responsibility for the items has been accepted by the buyer and will be repaired by an agreed-to date. In any event, the HOA will have to be satisfied the violation has or will be remedied.
🏡 What are Real Estate Agent Fees for Sellers?
This is the fee a Real Estate Agent will charge to sell your home. These fees are negotiable. Keep in mind the agent with the lowest commission fee may not get you the most money for selling your home. To sell a home for the most amount of money, your house first needs to be in great selling condition.
Sellers want an agent experienced in negotiation. Your agent will need to negotiate with the buyer’s agent. There are three key negotiating components to negotiate on a house sale. First, the agent needs to be able to negotiate with the buyer’s agent about price, closing date, or any other key items in the first purchase contract.
Once the buyer completes a home inspection, there may a request for the seller to make repairs. This is, in fact, more negotiation. Also, there may be negotiation needed regarding an appraisal if there are appraisal issues where the appraisal is below the contract price.
❓ What Happens to Money My Lender has in my Escrow Account?
When you initially took out the loan on your property, your lender collected 2 – 3 months of taxes to open the account. The lender also required a full year of home owner’s insurance to be paid upfront. Additionally, the lender would have collected 2 – 3 months of homeowners’ insurance.
These funds started your Escrow account at your lender. The term escrow means a third-party holding an item and then acting on the item when certain conditions are met. Your lender paid your property tax twice a year when billed by the county.
They also paid your homeowner’s insurance policy when due. Since your taxes must be paid current at the sale of the property. Your lender now has excess tax funds plus likely some home owner’s insurance to refund to you. Also, check with your homeowner insurance company. Let them know you have sold the property. They should also refund andy money already received that is not needed after the property sale.
💲 Should You Consider a Discount Brokerage?
Some discount brokerages may quote a lower fee than other brokerages. Be sure to ask about ALL fees to be sure you are making a valid comparison. There is a new trend for real estate companies to buy a house directly from the owner for a quick close. Always ask a discount brokerage what services you will receive. Ask about how the property will be marketed and where?. Will they negotiate on your behalf or are you expected to negotiate the purchase offer yourself?
This may work for some homeowners, however, you likely are receiving less money for your home than you would if you listed with an experienced Real Estate Agent. You typically get the most money for your house when it is exposed to multiple buyers through the multiple listing system and effective marketing. You also want an experienced agent, knowledgable on the market to negotiate the best possible price.
For sellers planning to put their home on the market, you may want to read about Selling Your Home Quickly in Phoenix, Arizona.
⚖️ Do I Pay For an Attorney in Arizona Real Estate?
Arizona allows real estate agents to practice contract law relative to home buying and selling. A typical real estate transaction does not involve an attorney. Buyers and sellers can always have an attorney review any paperwork they want to be reviewed. Some states, ie New Youk, for example, use attorneys as part of the transaction.
This means buyers and sellers pay extra for their services. The real estate documents used in Arizona are typically standard documents approved and provided by the Arizona Association of Realtor. These documents are updated periodically to address changes in law or to clarify particular points of the contract.
💲 How do I avoid Seller Expense When Selling Investments?
Are you familiar with a 1031 Exchange?
What is a 1031 Exchange?
The Internal Revenue Code* provides that a taxpayer may sell real property held for productive use in a trade or business or investment and defer payment of capital gains tax if that taxpayer uses the proceeds to acquire a like-kind replacement property.
- Capital gains tax is significant
- Reinvestment into replacement property allows the taxpayer to leverage dollars that would otherwise be spent on taxes
- Allows for non-income producing property to be replaced with income-producing property
- Allows a taxpayer to diversify a portfolio and minimize risk
📚 Who Pays For Title Insurance in Arizona?
This is a title policy that a seller purchases for their home buyer. This policy guarantees the buyer clear title to the house. If, for example, a year after the sale, someone contacts the buyer and claims rights to the house. If he/she can prove legal ownership of the property, that second owner may be due proceeds from the sale.
Why is this important? There could be many reasons why someone would put a lien on a property. The buyer of the property needs to know there are no liens on the property that could affect their ownership. The title company will complete research to identify any lien on the property so that the lienholder is paid from the proceeds of the house.
Or, if the lien exceeds the proceeds of the property, and the seller is unable to bring more funds to close on the property, the buyer can cancel the transaction and receive a full refund of the earnest money. There are various types of property liens, such as a mortgage lien, and IRS lien, a mechanics lien (for work performed on the property but not paid for).
The cost of the title insurance policy varies but is calculated based on the value of the property. A title company can quote a specific amount once given the sales price.
A buyer using a loan to purchase a home will purchase a title policy for their lender.
You may also be interested in reading about buying a St. Joseph Statue to sell your house.
💲 Who pays Escrow Fees? Buyer or Seller?
In Arizona, we use a Title or Escrow company as a neutral third-party to handle the sale of a property. Typically, the Seller will pay for a Title policy for the Buyer. And, if the Buyer is getting a loan, the buyer will buy a Title policy for their Lender.
The title company will conduct the title search, get fees due from a Home Owner’s Association (HOA), make sure the HOA is paid monies due from the seller at closing. They also ask the Covenants, Conditions & Restrictions (CCRs) from the HOA and ensure the information is sent to the buyers.
The title company will also hold the earnest money, receive funds from the buyer, and distribute funds to the seller. Seller’s pay their escrow fees and buyers pay their escrow fees.
Are you Selling a home AND buying a Home?
💲 How does Seller Loan Payoff work?
The title company will provide a form to the seller to sign which authorizes the title company to contact the lender on behalf of the seller.
The lender will provide the complete pay off up to the date of the scheduled closing of the transaction. At the closing, the title company will wire full pay off to the lender, on behalf of the buyer.
You may also be interested in reading about Seller Disclosure Documents in Arizona.
💵 What are other Lender Fees?
Lenders charge a variety of fees to buyers when giving a loan on a property. These fees can include Administrative fees, Documentation Preparation fees, Processing fee, and Appraisal fee and Credit Reporting fees. Check with your lender to get the complete list of their Lender fees.
⚖️ What is a Home Warranty for Sellers?
When the seller has agreed to purchase a home warranty for the buyer, the title company will send payment to the home warranty company at closing. Typically in Arizona, the home warranty is an item on the purchase contract and negotiated between the buyer and seller.
The amount the seller will pay for the home warranty can also be negotiated. The home warranty will cover many household items, such as the AC / Heating system, water heater, some plumbing items, appliances, and more. This is typically a one year warranty with a co-pay due when the service representative visits the house.
💲 What are Home Owner Transfer Fees?
Many HOAs will charge a fee for transferring the name on a property from the seller to the buyer. This can be paid by the buyer, seller, or split between the two. This too is part of the purchase contract HOA Addendum and is negotiated at the time a purchase offer is made.
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💲 Who pays Transfer Tax in Arizona?
The state of Arizona does not have a property transfer tax. However, several other states collect a transfer tax to raise revenue when a property sells. Arizona does not. There have been several attempts to pass a law to collect this additional tax, however, it has been voted down.
📘 What are Seller Disclosure Fees?
Sellers in Arizona will pay a fee to provide the buyer the Covenants, Conditions, and Restrictions (CCRs). The CCRs are the rules for the community. By purchasing a home within a Home Owner Association (HOA), the home buyer is agreeing to abide by the community rules. Additionally, these CCR’s are provided to the buyer after escrow has been opened.
Once the escrow is opened, the title company sends the notification to the HOA that the property is now under contract and there will be a new homeowner. In Arizona, a buyer has five days after receipt of the CCRs to cancel the contract if there are restrictions the buyer cannot live with. These are typically provided to the buyer in a paper, electronically, or even in a CD format. Arizona state law requires the seller to provide the CCRs of the community and the seller must pay for the CCR’s.
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💲 Who pays Outstanding HOA Dues?
If a seller is behind on HOA dues, these will be collected at the time of the sale of the property. Also, many HOAs have someone drive by the property once it is under contract to look for any violations of the CCRs. This type of violation could include too many weeds in a yard, a fence or gate in disrepair, etc.
Additionally, the HOA is looking for anything that puts the seller in violation of the CCRs. These items need to be resolved before the sale. If the property owner has an outstanding fine from earlier violations, this would need to be paid as well.
🚘 What are the Courier Fees?
Fees charged to send the loan payoff back to a lender, loan documents from the lender to the title company, etc. It is paid at closing.
💲 When are Closing Costs paid?
Closing costs are paid when the Buyer signs all final closing documents. Typically, a few days before the actual closing date.
❓ What Percentage Are Closing Costs in Arizona?
There is no single percent of costs for seller closing costs. The dollar amount of closing costs will vary by transition and by the seller. Seller Closing costs typically include commissions paid. Real estate commissions are negotiable. Sellers also need to pay their taxes current as part of the sale.
This means seller owed taxes are paid at closing. keep in mind, if a seller has a mortgage, the mortgage company will refund any excess taxes in a seller’s escrow account. And easy way to gauge how much you might receive back is to look at your monthly statement.
The statement usually shows the balance in a seller’s “escrow” or “impound” account. The lender collected money each month for taxes and insurance. The lender pays these two bills on behalf of the seller. Any excess in these accounts after the sale and loan has been paid off are refunded to the seller.
🏗️ Who Pays Capital improvement Fees?
Some HOAs charge Capital improvement fees. These fees add to the HOA coffers to help with capital improvements, such as pool maintenance, exterior maintenance, new roofs, roads, etc. This is a fee that can be paid for by the buyer or seller but traditionally paid for by the buyer since the buyer will benefit from the upcoming improvements.
This fee is in addition to any homeowner monthly fees or transfer fees. These fees will vary by HOA. We typically see higher Capital improvement fees (also called Reserve fees) in adult communities. Many adult communities not only have a community pool or are gated. Also, you can find large community recreation centers. Often these have multiple rooms the residents use for book clubs, computer clubs, quilters, woodworking, painting groups, clay and ceramics studies, etc.
Retirement communities often have many amenities for the residents. May folks move to the retirement from other areas, both locally and out of state. These gathering places help folks find new friends. Also, these areas provide places to enjoy old hobbies or learn new ones!
What Are Closing Costs When Selling A Home in Phoenix? Continue reading!
❓ What is a Settlement Statement?
When the buyer and seller sign their closing documents, the title company presents a settlement statement. Also, this shows the debits and credits to the buyer and seller. Buyers and sellers are encouraged to look at this statement over carefully and ask questions about any charges on their side of the statement.
For sellers, this shows the purchase price followed by expenses for the transaction. Also, sellers can expect to see agent commissions, title and escrow fees, taxes bring brought current, any HOA transfer fees, or HOE disclosure fees. And, A seller will also see the title insurance policy for the buyer they are purchasing.
Also, the statement will show contractual charges for the seller, such as a purchase of a home warranty or concessions towards buyer closing costs. Also, these are items agreed to in the purchase contract or addendum. Sellers should look carefully at the number and confirm these are the dollars they agreed to pay.
Sellers and buyers will want to hold on to the Settlement statement and be sure their tax preparer is giving this statement when preparing taxes for the year. This statement can identify tax-deductible expenses related to the sale. Many real estate agents send these statements out to their buyers and sellers for the year prior. While buyers and sellers get a copy of the Settlement statement in their closing package, it may not be easy to find this package at tax time!
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💲 What Other Home Seller Costs Should Sellers Consider?
As you prepare to move, keep in mind there are other expenses to consider.
🚚 Moving expenses
What will it cost to move your household into your new home? If you hire a moving company, you will have expenses of boxes, packing materials, and the move itself. Also, there could potentially be storage costs if you need to place your belongings in storage for a period of time. Also, these companies book up ahead of time, with spring and summer being prime moving time. Consult several companies for estimates. Be sure you are comparing apples to apples. Additionally, does their price include packing and materials? Check the Better Business Bureau or get a reference from someone who has used the company you are considering.
Some folks consider using the POD services. With a POD, the company will deliver a POD or container to your house. Also, you can pack at you’re convenience and they will move the POD when you are ready. Another option is to pack yourself and rent a moving truck. Again, check for availability. Also, be sure you have help to loans and unload the truck!
🏡 Home improvements
You probably have made improvements to your home. Always keep receipts as proof of the upgrades. And, keep them in a house file for ease of locating them. Give these receipts along with your final settlement statement to your tax preparer at tax time. Also if you can show you have invested money in home improvements, this can reduce your tax liability. Additionally, don’t forget the work you did to get your property ready to sell. Did you install new flooring? Also, did you update appliances, etc.? Your tax accountant can look at these items along with your final settlement statement and make sure you only pay the necessary taxes!
🕵️ Home inspections
We always recommend a seller complete a Home Inspection when they are ready to sell their house. This does two things. First, the homeowner can make repairs at their convenience and shop around for contractors or handymen as needed. Second, this avoids any surprises. Additionally, Home inspection reports are long and cover a variety of items and systems. Often these items are minor and inexpensive. However, some sometimes buyer sees a long list and gets nervous. Also, they may even be scared away before providing the seller an opportunity to makes repairs. Additionally, the price of a home inspection varies by house size, house age, and whether other inspections are needed, such as a pool or termite inspection.
Are You wondering what are closing costs are when selling a home in Phoenix? This list will help you understand what to expect as you consider selling your house. Every sale is different so fees will vary by sale and seller.
Not all sellers have loans, not all homes are in HOA communities. Your Real Estate Agent can provide an estimate of your sales proceeds for your home. The key question for most sellers is how much money will I receive from the sale of my property.
🖩 Instant Home Value Estimator
To get answers about real estate, contact Shirley Coomer at Keller Williams Realty. For most of us, our home is our most important asset. We need to sell for top dollar. You need someone experienced in sales and marketing. A seller and their real estate agent can negotiate many of the costs associated with the sale of a home. The buyer’s offer to buy a home includes more than just the sale price. Some buyers ask for closing cost help, or they may ask for the seller to pay HOA transfer fees. Buyers may also ask for a seller t pay for a home warranty. All these items are negotiable and can make a difference in how much a seller will net from the sale.
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About the author: The above Real Estate information on What Are Closing Costs When Selling A Home in Phoenix, Az was provided by Shirley Coomer. She has been a full-time real estate agent in the metro Phoenix area with Keller Williams Realty Sonoran Living since March 2005. Shirley has helped people move in and out of many cities in the Phoenix metro area.
Are you thinking of selling your home? Shirley has a passion for Real Estate and loves to share her marketing expertise! With well developed negotiating skills, she can get you more money for your home or more home for your money!
Shirley services Real Estate Sales in the following Metro area – Phoenix, Tempe, Chandler, Gilbert, Mesa, Queen Creek, San Tan Valley, Maricopa, Scottsdale, Peoria, Glendale, Fountain Hills, Goodyear, Surprise, Avondale, Casa grande
For Real Estate contact Keller Williams Realty Phoenix:
Contact the Shirley Coomer Group at Keller Williams Realty Sonoran Living
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What Are Closing Costs When Selling A Home in Phoenix?