When selling a home in Massachusetts it is always
good to know exactly what money you will walk away with at closing!! Unexpected
Real Estate surprises are never fun. Most home owners know that the sales price
of their home less the mortgage balance will give them an idea of what they can
expect, however there are a number of other costs in selling a home.
As a Realtor representing many homeowners
selling their homes I find most Seller are unaware of the tax on selling a
home in Massachusetts. This cost is known as Massachusetts Tax Stamps or
the Massachusetts property transfer tax.
This tax is levied on the sale of any home sold
in the Commonwealth of Massachusetts and based on the Sales Price. Presently
the tax rate is $4.56 dollars per thousand.
In
other words if you sell a home for $350,000 your tax would be $4.56 x 350 for a
total cost of $1,596. When you have certain expectations for what your check
will be coming from a closing, an unexpected cost of $1,596 would not be a
pleasant experience! This tax is paid at closing.
Some of the other expenses in selling a home in
Massachusetts would be a Title V
Inspection if you do not have town/city sewer. The typical cost for a Title V Inspection runs between $600
- $1,200 depending on how easy it is for the Title V Inspector to get to the
tank and distribution box and if they pump the tank at the time of inspection.
Once the Title V is complete, the report is good for 2 years from the date of
the report or 3 years if you have the tank pumped every year and keep a
receipt.
Other costs include hiring a Real Estate Attorney to represent you in preparing a purchase and sale agreement and assist with closing. Legal representation can vary quite a bit. As a general rule of thumb the costs for legal representation in a Real Estate sale can vary anywhere from $300-$1500 depending on the scope of work.
Having a lawyer represent you is never recommended. Realtors are not allowed to council buyers and sellers in legal matters. If you are unsure of something in an offer to purchase or purchase and sale agreement a Realtor is not supposed to give you legal advice. More often than not the buyer purchasing your home will have legal council as well.
Another cost will be your Real Estate Agent’s Commission.
This fee is for services your Agent provides to you. Commissions range and are negotiated with
your agent. The fee is a percentage of
the sales price of the home.
Wendy L. Johnson RE/MAX Professional Associates
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Some of the smaller miscellaneous expenses include a Smoke/Carbon Monoxide Inspection Certificate which usually run around $25- $50. All Homes must have a Carbon Monoxide Detector on all living levels and appropriate smoke detectors. Your Local Fire Department can provide you with the information on what your town requires.
Recording the new deed at the registry is another
small fee and is typically around $125-$150. There will also be some minor
miscellaneous costs for mailing, filing fees etc that will be added to your HUD
settlement statement at the closing. These charges include overnight
mailing, courier services, wiring fees, charges for processing mortgage
discharges, and recording fees for recording various documents at the
Registry of Deeds. These costs will usually amount to a few hundred dollars.
Lastly, don't forget the costs involved with hiring a moving company if you choose to do so and contact your Accountant to see how the sale of your home will impact your tax returns for the fiscal year.
So a quick recap of the costs involved with
selling a Massachusetts home include:
•
Real Estate commission
•
Real Estate tax stamps
•
Title V septic Inspection if no town/city sewer
•
Hiring a Real Estate Attorney
•
Preparation of a new deed
•
Smoke detector/carbon monoxide inspection
• Hiring a professional moving company/contact your Accountant
• Miscellaneous HUD settlement charges including recording fees, wiring/courier charges and mortgage discharges