In any sale, there are expenses for both the buyer and the seller. The benefit of a cash sale is you as the seller will have fewer closing costs than in a traditional home sale. Before going into closing, you should know what is expected of you.
Taxes
Every sale comes with certain taxes. The overall taxes you pay depend on your state and local laws and some are even calculated based on your tax bracket. One common tax is the capital gains tax. If your home has increased in value since you bought it, then you could pay a tax based on the capital gain. This amount is calculated based on your tax filing status. Another tax you will likely pay is the property transfer tax which is applied anytime ownership of a property is changed. Lastly, you will have to pay your property taxes up until closing. You do have the option to prorate these taxes if necessary.
Fees
In addition to taxes, there are several fees applied to a home sale. These fees cover all the processes necessary for transferring the property and they also help pay for anyone involved. For example, if you use an attorney there will be some fees attached. You may also pay fees to the escrow and title companies you work with as well as a notary. There are fees for searching for the title of the home and for recording that the title has been transferred to a new owner. If you and the buyer agree on having an inspection or appraisal done, there are fees attached to this as well.
No Realtor Commission
Cash sales are popular partly because they are much cheaper than regular sales. These lower costs stem from the fact that no real estate agents are involved. Real estate agents typically take a commission that comes out to be about 6% of the sale price. The burden of paying these commissions is usually on the seller. In a cash sale, you don’t need to pay this commission and instead only need to worry about the taxes, fees, and other costs.
A cash sale is a much cheaper option, but there are still costs to be aware of. Make sure you are financially able to handle all these costs. When you work with an experienced buyer, you can discuss with them what common costs you need to know about.
Offer Hut is an experienced buyer. Click here to receive a fast cash offer on your home.
