Seller paid closing costs in North Carolina are very reasonable compared to other states. Outside of payoffs for any existing loans and/or other liens on the property, the largest Seller paid closing costs will likely be the real estate agent commission(s) and any Seller paid closing costs for the buyer indicated in the sales contract. Seller closing costs are indicated on the Seller Closing Disclosure and/or HUD Settlement Statement (for cash closings) and are deducted from the Seller’s proceeds from the sale on the property.The categories of Seller paid closing costs are as follows:
- Loan/Mortgage Payoffs (and any other outstanding liens)
- Real Estate Commission
- Excise Tax/Revenue Stamps
- Proration of Property Taxes
- Proration of Home Owners Association (HOA) dues & Transfer Fees
- Document Preparation
Loan/Mortgage Payoffs (and any other outstanding liens): Sellers current loans on the property are paid off at closing in addition to any outstanding liens and/or judgments that may attach to the property.
Real Estate Commission:Real estate sales commissions are paid by the Seller for both the Buyer’s Agent and the Seller’s Agent (referred to as the Listing Agent). Total Real estate commission is typically between 5% and 6% of the total purchase price (between 2.5% and 3% for each agent).
Excise Tax/Revenue Stamps: The State of North Carolina charges an excise tax on home sales of $2.00 per $1,000.00 of the sales price. Excise tax is customarily paid by the Seller, but payment is dictated by the sales contract and can be negotiated for either party.
Property Taxes: County and City Property taxes will be prorated based upon the number of days that the Seller has owned the property during the current calendar year. If the property taxes have not been paid for the current year, the Seller will owe the Buyer the property taxes for the time the Seller has owned the property. However, if the property taxes have already been paid for the current year, the Buyer will reimburse the Seller for the property taxes paid during their ownership. This is accounted for on the Closing Disclosure or HUD Settlement Statement at closing.
HOA Dues & Transfer Fees: Home Owner’s Association (HOA) Dues will be prorated based upon the current status of payment on a monthly, quarterly or annual basis. HOA Transfer fees are customarily paid by the seller, but payment is dictated by the sales contract and can be negotiated for either party. HOA Transfer fees are paid to the HOA Management Company and are typically $150-$300 dollars.
Document Preparation: The preparation of the deed conveying the property to the Buyer and other Seller documents necessary for tax purposes should be drafted by an attorney in North Carolina. Seller document preparation is typically $150-$300 dollars, depending upon the number of Sellers involved. Preparation of Seller documents for an estate, the heirs of an estate or a trust are typically more expensive. Unless specifically stated or requested otherwise, the Closing Attorney represents the Buyer in a purchase, and not the Seller.Preparation of a deed and other typical Seller documents on behalf of the Seller does not imply any other legal representation by the Closing Attorney on behalf of the Seller.