What Types Of Expenses Are Prorated When Selling Your Home?
When you sell your house through a real estate agency, your main expense will be the commission you pay the agency when the house sells. While this is the main expense you will have, there may also be some other expenses that will be deducted from the proceeds of the sale at your closing appointment for the home. Most of these will be expenses that are prorated, and here are some that you should expect to pay at your closing.
Home loan with added interest
The main thing that will come out the proceeds of the sale of your house will be the principle balance you owe on your mortgage. When this occurs, the lender will calculate the balance you owe with principle. If you look at your last mortgage statement, you will see the principle balance that you owe. The amount you will pay at closing will be higher than this, simply because there will be interest that accrues from the time the statement was printed to the date of your closing.
Property taxes
You will also have to pay prorated property taxes when you close on the home. Property taxes are calculated annually; however, they are not due and payable until the next year, and you will be responsible to pay all the property taxes that have accrued up to the day of closing. This means that you will be responsible for the entire year of property taxes from the previous year, and you will also have to pay the taxes from January 1 to the date of your closing.
For example, if your property taxes are $800 per year and your closing is on May 1, you will owe the $800 from last year and the prorated amount for this year, which would be $266.66. This would be a total of $1,066.66 that will be deducted from your house sale proceeds.
Homeowner's association fees
If the home you are selling belonged to a homeowner's association, you will also have to pay any fees that are past-due and any prorated fees that apply. If you do not live in a community with an association, you will not have to worry about these fees.
The person buying your house will have a lot of fees to pay for the loan he or she gets, but you will also have some fees to pay. To learn more about the fees related to selling a home, contact a real estate agency in your neighborhood.
