Understanding Closing Costs for Home Sellers Along the Seacoast of NH and Maine

Selling your home is an exciting journey, but it comes with a few financial surprises. Imagine sitting at the closing table, expecting to pocket a nice sum, only to discover that various fees are eating into your profits. That's the reality of closing costs. If you’re not prepared for them, they can reduce your overall earnings.

In this blog, we’ll break down the typical costs you, as a seller in Seacoast New Hampshire, might face, why these expenses exist, and tips to hang onto more of your money at the end of the sale.

What Are Closing Costs?

Closing costs are the final expenses you incur to complete the sale of your home. These costs include everything from recording fees to legal services. On average, sellers along the Seacoast of NH and Maine pay between 6% to 10% of the home's sale price in closing costs.

Understanding these costs ahead of time allows you to budget effectively and avoid any unwelcome surprises.

Common Closing Costs for Home Sellers

1. Real Estate Agent Fees

Real estate commissions remain a key expense for many sellers, but recent changes have made them more flexible and negotiable. Sellers are no longer required to cover the buyer’s agent commission, and all commission agreements must be clearly disclosed and agreed upon upfront.

How Much Do Commissions Cost?

Traditionally, commission rates ranged from 5% to 6% of the sale price. However, with the new rules, commission structures vary more widely and are subject to direct negotiation between sellers, buyers, and agents.

Who Pays the Commission?

• Sellers may still choose to pay the buyer’s agent commission, but it is no longer an industry standard.
• Some buyers may now be responsible for paying their own agent’s commission.
• Listing agents still charge a fee for marketing, negotiations, and transaction management, but the rate is now more customizable.

2. Transfer Taxes and Recording Fees

These are local and state fees required to transfer property ownership legally. New Hampshire, for example, has specific regulations and costs.

• How much do these cost? They vary, usually between 0.5% to 2% of the sale price.
• Who pays? Typically, the seller covers these costs, though the buyer might share some of them depending on your agreement.

3. Title Insurance (Owner’s Policy)

Title insurance protects the new buyer from any legal challenges related to property ownership. It’s usually customary in Seacoast NH for sellers to cover this.

• Mandatory? No, but it’s typically expected.
• Cost: Around 0.5% to 1% of the home’s sale price.

4. Escrow and Closing Fees

These fees cover services that handle the financial and document transactions securely.

• Role of escrow companies:
• Holding funds securely.
• Ensuring all terms of the sale are met before money changes hands.
• Cost: Between $500 and $2,000, depending on your location and service providers in Seacoast NH.

5. Prorated Property Taxes

Property taxes in New Hampshire are paid annually. As a seller, you’ll only pay up until the closing date.

• Calculation: Split the annual property tax bill based on the number of days you've owned the home during the tax year.
• Example: A tax bill of $7,000, sold midway through the year means you’ll owe $3,500 in prorated taxes.

6. Homeowners Association (HOA) Fees

If your home is part of an HOA, expect a few additional fees.

• Outstanding dues: All unpaid HOA fees must be resolved before closing.
• Transfer fees: Some HOAs charge a fee, ranging from $200 to $1,000, to process the ownership change.

7. Attorney Fees (If Required)

In New Hampshire, hiring a real estate attorney is often necessary to finalize your home sale legally.

• Cost: Typically ranges from $500 to $1,500.
• Services provided:
• Review sale contracts and closing documents.
• Ensure everything is legally sound.

How to Reduce Your Closing Costs

Closing costs can take a sizable chunk out of your home sale profits, but the good news is that there are ways to cut back on these expenses. Whether through negotiation, strategic choices, or finding cost-effective service providers, you have options to keep more money in your pocket. Here are some practical ways to lower your closing costs as a seller.

Sell Without an Agent (FSBO) — this means no listing agent commission. However, you’ll still need to:

• Pay the buyer’s agent commission (usually 2.5% to 3%).
• Handle marketing, negotiations, and paperwork yourself.

FSBO works best if you have experience in real estate or a buyer already lined up.

Ask the Buyer to Cover Some Costs

• In some deals, buyers agree to cover certain closing costs instead of negotiating a lower sale price.
• This works best in a seller’s market, where buyers compete for homes.

Shop Around for Service Providers

• Get multiple quotes for title insurance, escrow services, and attorneys.
• Some companies offer discounts for bundled services.

Preparing for Closing

As you approach the finish line of your home sale, there are still a few final steps to take before closing day. Proper preparation can help avoid last-minute surprises and ensure everything goes smoothly. Here’s what you need to do before handing over the keys.

1. Review the Closing Disclosure Early

• You’ll get a Closing Disclosure a few days before closing that lists all costs.
• Review it carefully to catch any unexpected charges.

2. Finalize Repairs and Paperwork

• Complete any agreed-upon repairs before closing.

Make sure liens, HOA fees, and taxes are paid to avoid delays.

Final Thoughts

Selling a home involves more than just finding the right buyer. Closing costs can add up quickly, but if you know what to expect and prepare in advance, you can hold onto more of your hard-earned money.