If you are considering selling your Austin area home, you are likely wondering what fees are involved in the sale. In order to determine if selling your home is in your best financial interest you need to understand all of the costs associated with selling, and have a good idea of the price at which you can sell your Austin area home. Many of the costs associated with selling your home are negotiable items in the standard Texas real estate contract; however, there are items that are typically seller expenses and other fees that you are certain to pay when you sell your Austin house. Below is a break down of the various fees you can expect when selling your home in Austin, Texas.
Real Estate Broker Commissions
If you are going to be listing your home for sale with a real estate agent, you are going to have to pay commissions. Although there are no set commissions in Austin, the vast majority of homes listed for sale in the Austin Board of Realtors MLS will show a 3% buyer’s agent commission. Real estate broker commissions are negotiated when you sign a listing agreement with a broker. In the Austin real estate market, it’s quite typical to pay 6% of the sales price as a commission fee when you sell your home. 3% of this fee usually goes to the buyer’s broker and 3% will go to the listing broker. However, as I mentioned earlier these fees are negotiable, and many brokers such as myself will offer a discount to the commission fee when you are buying and selling a home at the same time. For example, if you are selling your Austin house and buying a new home in the Austin area, I will reduce the listing broker fee to 2%. These fees may seem like a lot to you, but they cover all of the expenses and work involved with selling your home. The listing broker will pay for all photos, videography, and marketing. In addition they will respond to all inquiries about your home, show the home, negotiate on your behalf and much more. If you’re thinking of doing this on your own, you can learn more about listing your home FSBO here. Spoiler Alert: It’s a lot more work than you think and usually ends up costing you more!
The title policy protects against any unknown claims of ownership to the property. The cost of the title policy is negotiable in the Texas real estate purchase contract. However, it is very common for the seller to pay the cost of the owner’s title policy in the Austin real estate market. Occasionally, in competitive multiple offer situations, you will see the buyer offer to pay the owner’s title policy. This is vary rare, and not something to count on when estimating the fees associated with selling your Austin home. The owner’s title policy cost is regulated in the state of Texas. No matter what title company you use, you will pay the same amount for the owner’s title policy. These rates are based on the sales price of your home. You can view the full rate chart here. As an example on a $400,000 home sale you can expect to pay $2,413 for the owner’s title policy in Texas. If the person purchasing your home is financing the home purchase a lender’s title policy will also be required. This is typically a buyer expense.
Another negotiable item in the Texas real estate contract is the home warranty. In the contract it is referred to as a residential service contract, and the contract is worded in such a way as to presume the seller will pay up to a certain amount towards a home warranty coverage program. This is a negotiable amount, and the buyer may or may not request the seller contribute towards this expense. Home warranty fees vary but you can expect to see a buyer request a seller contribution of $400-$600 towards the buyer’s home warranty.
There will also be fees charged by the title company to facilitate the transaction. These are known as escrow fees. These fees vary from one title company to the next, and are usually split between the buyer and seller. However, if you are simply looking for a rough guess as to what to expect, you can estimate $500 for the seller’s portion of the escrow fees. You may also have to pay attorney document fees, recording fees, or notary fees. These should total less than a few hundred dollars.
Property taxes are paid in arrears in Austin. Thus, you will need to pay your portion of the property taxes for the time you lived in the home at the closing. These will be calculated based on the number of days you occupied the home and the most recent property tax bill available. Your pro-rated share of the property taxes will appear as a debit to you (the seller) and a credit to the buyer on your final settlement statement at closing. You can look up your property taxes on the county tax appraisal district’s website by simply searching for your address; here’s a link if you live in Travis County. Find the annual tax bill amount, divide by 365 and then multiply by the number of days you expect to have lived in the home for the year.
You may encounter other fees when selling your Austin home. If you live in an area where there is a home owner’s association, you may need to pay for a portion or all of the HOA document and transfer fees. You may also be asked to contribute towards a buyer’s closing costs. You could need to make repairs or make monetary concessions for repairs found during the buyer’s inspection. Again, all of these items are negotiable and that’s why it’s important to have a strong real estate broker by your side to guide you through the process and negotiate on your behalf.
If you’re thinking about selling your Austin area home, contact me today. I can give you an in-depth evaluation of what your home is worth and provide a highly specific estimate of all of the fees involved in the sale of your Austin home. Don’t worry, if you’re not ready to sell I’m not going to pester you with consistent calls or e-mails either!
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