Whether you’re currently in the process of selling your California home or you’ve been thinking about putting it on the market for years, it’s important to be aware of the closing costs and tax-write-offs associated with selling. At American Dream Realty in Woodland Hills, our certified real estate agents have successfully helped thousands of people sell their homes quickly and efficiently. Our listing agents have ample experience in the California real estate market and they understand the expected closing costs and tax write-offs associated with selling a home. If you need assistance listing your home, contact our professional listing agents today!
Home Seller Closing Costs
For most sellers in California, closing costs may include lender payoff fees, property taxes, HOA dues, escrow fees, title fees, broker commissions, and more. If you have a mortgage when you sell your home, your lender will collect the principal balance along with any unpaid interest. Luckily for sellers, there are always fewer line items on an estimated closing statement, however the seller normally has to pay the real estate commission which tends to be the biggest fee. Most California real estate agents charge from 5 to 6 percent commission on the home purchase price. In addition to these commissions, the seller may also have to pay:
- Title Insurance Premiums – More often than not, California homeowners are required to pay for the owner’s title insurance. This protects the owner in the event that title issues are discovered down the line.
- Transfer Taxes & Recording Fees – These are taxes and fees that the county or local governments impose for the official transfer of the property’s title.
- Attorney Fees – If you have an attorney represent you during the home-selling process, you’ll have to pay for their time and work.
- Home Warranty – Whether you’re selling a home in Thousand Oaks or Simi Valley, you may decide to ease buyers’ worries by offering them a home warranty. This warranty will cover most of the repair costs if a major system breaks after the home is sold. One-year warranties can range from anywhere between 350 to 500 dollars.
- Taxes & Neighborhood Fees – When you sell your California home, you’ll likely owe a prorated share of your property taxes. If you have recently paid your taxes, this number could be close to zero. Depending on your geographic location, the tax is generally between .01- and two percent of the sales price. In addition, if your neighborhood has a homeowners association or HOA, you can expect to pay a prorated membership fee.
- Home Staging – Your certified real estate agent may recommend removing clutter and staging your home for showings and open houses. Some homeowners go as far as hiring an interior designer to rent furniture and rearrange their home to attract more buyers.
Mortgage Interest & California Real Estate Tax
Depending on the current financial status of your home, you may be required to pay mortgage interest at the time of closing. Depending on your closing date and where you live, you may owe some real estate tax as well. If you refinanced your mortgage while you owned your home and paid points in cash to bring down your interest rate, the IRS will let you deduct a portion of those points every year until the loan is paid off. Once you have paid off your mortgage by selling your home, you can deduct everything else in one fell swoop.
At American Dream Realty, we understand how stressful and complex the home selling process can be, especially in California. If you need help selling your home, condominium or apartment, contact our knowledgeable real estate agents and listing agents today!
If you’re selling your home in conjunction with moving for a new job, you may be able to deduct your moving expenses. In order to qualify for this, your home must be at least 50 miles closer to your new job than your old home was. If you do happen to qualify for this tax write-off, you will be able to write off your travel expenses, moving supplies, moving costs, and any mileage you drive to get to your new home. This tax write-off can be especially helpful because it is claimed as an adjustment to your income, rather than an itemized deduction. This means that it reduces your adjusted gross income, which can make it easier for you to claim other deductions at the end of the year as well.
Selling your California home is one of the largest transactions you’ll ever make, so it’s important to work with a reliable real estate company to ensure you get the best price for your property. At American Dream Realty in Woodland Hills, we’ve helped thousands of people and families across California sell their homes, condominiums, and apartments through our strategic listing and selling techniques. Contact our agents today to learn more about our services!