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In Delaware, closing costs typically range from 3% to 10% of the home’s sale price. Even though the buyer is the one who brings all the cash, the seller still settles some closing costs.
In this post, we break down some expected seller closing costs. You’ll want to know about these profit deductions ahead of time so you don’t experience shock when you look at your settlement statement at the end of the sale.
Before you transfer the title to a new owner, you must first pay off your mortgage. The remaining principal and interest due until the loan is paid off are included in the payback.
Taxes on real estate
Delaware has one of the country’s lowest median property tax rates. Within counties, property tax rates vary by tax district. The average property tax rates for each county are listed below as a basic guide:
- 0.74% in New Castle County
- 0.51% in Kent County
- 0.34% in Sussex County
Fee for reconveyance
The lender provides you a reconveyance deed as proof once you’ve paid off your mortgage in full. As the seller, you must pay the reconveyance fee to get this formal paperwork. Fees for reconveyance vary greatly, but you may anticipate paying between $55 and $65.
The reconveyance deed must be filed with the county recording office. The cost of recording varies by county.
4. Tax on real estate transfers
In Delaware, the seller and buyer must pay county and state transfer taxes on the home sale.
Delaware raised the state realty transfer tax from 1.5% to 2.5% in 2017. The state tax is 3% for property located in places where there is no municipal realty transfer tax.
Transfer taxes are usually shared between the buyer and the seller. Depending on your local tax rate, you’ll be charged with paying 1.5% to 2% of the home sale price in realty transfer taxes as a seller.
Check out this post: Is It Time To Sell Your House? 8 Fortunate Signs to Look Out For
The average real estate agent commission in the United States is 5.8% of the sales price, which includes both the listing and buyer’s agent fees. Traditionally, the seller pays both agents’ commissions, even though the buyer is the one who brings the cash.
Attorney expenses are always included in Delaware closing costs because the state requires the use of a lawyer. The title transfer is managed by your closing attorney, who also evaluates the closing documents.
You may budget a fixed charge of anywhere between $150 and $500 for attorney closing costs (sellers pay $450 to $550 on average).
Homeowner’s association dues
Any unpaid homeowner’s association dues or home association fees is a closing cost that must be paid by the seller. These fees are typically prorated based on the date of the sale.
HOA fees vary greatly depending on the home’s location, size, and neighborhood features. If a community costs more than $500 per month in Delaware, a seller must submit entire HOA documentation to their buyer.
Concessions from the seller
Sellers may owe money at closing for financial concessions they agreed to pay for during the negotiation phase to help clinch the deal. Cash for closing costs, repairs, and home warranties are examples of concessions.
Repair credits are one of the most common seller concessions. If a buyer includes a home inspection contingency in their offer, they can walk away from the transaction without losing their earnest money if the seller refuses to make the repairs that the home inspector considers necessary. Instead of taking care of the repairs, sellers might issue repair credits to the buyer at closing.
Repair credits are cash that can be used to pay the cost of essential repairs. Repair credits are not common in a seller’s market. In a competitive seller’s market, buyers may choose to forego home inspections entirely to make their offer more appealing than the competition’s.
While these are the average closing costs for a seller in Delaware, keep in mind that many of these closing costs are negotiable. Your buyer may ask you to cover closing costs that they would normally fund and vice versa. Work with your realtor to guarantee you pay the least amount of closing fees feasible without endangering your sale.