It should be simple. You get an offer on your home. You take the offer price, subtract your remaining mortgage, and that’s what you should expect to walk away with after the sale. But as you know, that’s not how it works. We broke down the cost to sell your home in Arizona. The ones you have to pay and the ones you will most likely pay.
If you enter into an agreement to sell your home the buyer is going to want to receive free and clear rights to your home. This is what the owner’s title policy provides. It protects the future buyer against any possible un-recorded deeds, clouds, or liens on the property. The seller is responsible for this cost. If the buyer is taking a mortgage against the property for the sale, they would be responsible to buy title insurance for their lender.
Escrow and Title Fees
This is paid to the title/escrow company conducting the closing. The title company or escrow oversees the closing as a neutral party to the closing of your home. Thier fees are normally split 50/50 with the buyer. In some states, Attorneys are needed to transfer title. Arizona is not one of those states.
Taxes and Insurance
In Arizona, your property taxes are due twice a year. October, to pay the taxes due from January to June the same year. Then again in March to pay for last year’s July to December taxes. This is prorated to the day of closing. Since taxes are paid in arrears, to transfer title you need to pay any back taxes when selling your home. To give you an example, if your close of escrow date is March 7th. You will have to pay the taxes from January 1st to March 7th. The same goes for your insurance payment. The cost to sell your home can go up or down depending on your close of escrow date.
How To Calculate The Cost To Sell Your Home
Now that we went over the basic cost to sell your home you might be wondering how much they cost. All cost are going to be based on the price of your home. The higher the price the higher the fees. Most title companies have an online closing cost calculator to give you an estimate.
The fees we just discussed were the basic. The bare minimum cost to sell your home. There are other fees that are commonplace that might affect your bottom line. Here are a few more fees to expect when selling.
Some people go the route of “For Sale By Owner”. They too would have to pay the fees mentioned before. Most people hire professional representation which can be a large cost to sell your home. Broker fees are not set by law and are negotiable. In the Arizona market, it is very common for an Agent to charge 6% of the sales price of your home. In today’s market, you do not need to pay such high fees. To save money you can check out our Full-Service, Flat Listing Fee Model.
If you live within a Home Owner’s Association you will have an additional cost to sell your home. These can range from the transfer fee, capital improvement fee, and disclosure fee. By law, the Seller is required to pay the disclosure fee in Arizona. This is capped at $400. It is common for the Buyer to pay the transfer fee but it and other fees are negotiable. Any fees related to the transferring of ownership should be investigated and disclosed on the HOA addendum so there are no surprises at the close of escrow.
It is common for the Buyer to conduct an inspection of the home before taking ownership. They do have a right during the “Due Diligence” period to come back to the Seller and request items to be repaired. In Arizona, there are no warranties in the contract stating the Seller has to fix any item. So any requests made are negotiable. But let’s face it if you have a home that has no working A/C it will be hard to find a buyer. So consider home repair as a cost to sell your home.
This cost is also negotiable but very common for the Seller to pay. Providing a limited home warranty gives your Buyer peace of mind. The cost for a warranty can vary by the size of the home, the amenities of the home (i.e pool) and the amount of coverage. You can estimate the cost to be around $400-700
As you can see the costs can add up. Where can you save money? You could try For Sale by Owner but they you are adding extra cost for marketing and your time. With today’s technology, you no longer have to pay a high percentage to receive full service and full representation from a licensed expert. If you are looking to keep the cost to sell your home down, contact us today for a free consultation.