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Originally Posted On: https://webuylongislandhomesfast.com/who-pays-closing-costs-selling-house-long-island/
Who Pays Closing Costs When Selling a House on Long Island?
Real estate transactions aren’t as straightforward as buying something from a store or online. They involve many other costs aside from the purchase price of the property.
Closing costs are the most common fees associated with property transactions. These may differ depending on your location, but you can expect to pay these extra costs when you sell your home on Long Island.
Usually, sellers and buyers share these costs. The split depends on the specific terms of the sale agreement and negotiations between the parties.
Read on to find out more about closing costs on Long Island before you sell your house.
Understanding Closing Costs on Long Island
Closing costs is the broad term for all the additional costs over and above the property’s sale price. These costs are mandatory during traditional real estate sales.
You cannot conclude a real estate sale without paying the closing costs, which are usually split between the buyer and the seller.
There are two types of closing costs, i.e., bank-related costs and title-related costs. The following are examples of closing costs for sellers in Nassau County:
- Real estate agent commissions
- Title insurance
- Title service fees
- Real estate transfer tax
- Property taxes prorated up to the closing date
- Attorney fees
- Recording fees
- Prorated HOA fees, if applicable
Some sellers offer a home warranty to entice potential buyers, and this would also form part of the closing costs
In Nassau County, the seller usually pays the larger portion of the closing costs. These taxes and fees can amount to as much as 6% to 10% of the home’s value.
Buyers typically pay for the following:
- Loan origination fees
- Mortgage recording tax
- New York Mansion Tax for property valued at over $1 million
- Title Insurance
- Land survey fee
- Lead-based paint inspection
The above is a general breakdown of how closing costs are split in New York, but they may vary depending on the conditions of the sale and other specifics related to the property. Either party may pay all or some of the closing costs.
In most cases, sellers don’t pay closing costs out-of-pocket at the closing table. These are usually deducted from the money received at the sale, so they impact how much you receive from the sale of your home.
Closing Costs: Cash Buyer vs. Loan Buyer
Cash buyers can avoid many closing costs associated with a home sale as they don’t need to apply for a mortgage. That means they don’t pay the costs associated with home inspections, home appraisals, mortgage tax, and loan origination fees.
Due to these savings, sellers can often negotiate with them to pay some or all of the other closing costs associated with the sale.
Benefits of Selling to a Cash Buyer
Selling your home to a cash buyer is a much faster and often easier process than selling to a mortgage buyer. When you sell your home to a cash buyer, you enjoy the following benefits:
Avoid Contingencies
Cash buyers do not need to apply for a mortgage. That means you won’t lose your sale if the buyer is unable to achieve mortgage approval.
You can also avoid sale contingencies since you don’t need to wait long for the sale of your home before buying another one.
No Home Appraisals
When you sell to a cash buyer, you avoid the time delays associated with a mortgage-lender-mandated home appraisal. Some cash investors might ask for an appraisal to ensure they’re getting their money’s worth, but that rarely happens.
Simplified Closing Procedure
When you close on a cash sale, you only need to sign the settlement statement, title, and deed. The buyer pays the purchase price via wire transfer or cashier check, greatly reducing the paperwork involved in the transaction.
Less Hassle and a Faster Sale
Selling your home for cash means you won’t need to carry out any repairs mandated by the mortgage lender, and you can skip paying a real estate agent’s commission, too.
These fees are currently around 6% of the home’s sale price, but they could change soon depending on an upcoming NAR court case.
Seller Closing Costs for a Cash Sale
There are some unavoidable closing costs associated with every home sale, cash or otherwise. These include:
- Legal fees
- A title search
- Realtor’s commission, if applicable
- Home warranty
- Transfer taxes
- Prorated property taxes
Some national or corporate cash home-buying companies also charge a service fee when they buy your home for cash while other local homebuying companies will take care of these fees to deliver a straigtforward offer.
Negotiating Closing Costs with Cash Buyers
Some buyers, including cash buyers, will ask the seller to pay some or all of the closing costs on their property. If you agree to this, you should make sure you increase your price accordingly.
Getting the buyer to pay closing costs is a little more complicated, but it’s easier if there’s a high demand for your property. In this case, you can include payment of the closing costs as part of the sale conditions.
You can create demand by staging the home, marketing it intensively, or completing desirable upgrades. In many cases, all this time, expense, and effort may outweigh the benefit of avoiding the closing costs.
If you want to avoid paying seller closing costs out of your pocket, it’s best to find a cash home-buying company that will pay the costs on your behalf and then deduct them from their offer.
Sell Your Long Island Home for Cash
Selling your home for cash is a good way to avoid many of the closing costs associated with real estate sales. A cash sale doesn’t need to include realtor commissions, mortgage origination fees, or home inspection costs.
When you sell to the right buyer, you can reduce your closing costs even more.
When you sell your home to We Buy Long Island Homes Fast, our offer includes all your closing costs, helping you save time and skip the hassles associated with conventional home sales. We can close in just 14 days, and we buy homes as-is, eliminating the need for cleaning, upgrades, and repairs.
Get a fair cash offer for your Long Island home today.
