Indiana Home Selling Costs
While selling thousands of homes in the Northern Indiana area over the last thirty five years, I realized many homeowners don’t realize all the home selling costs involved with selling a home. The downside to this is unexpected cost surprises.
To prevent this from happening, it’s important that a real estate agent educates his or her clients and makes them aware of all the potential costs so there are no surprises during the transaction. This creates a happier client and better experience.
Below you’ll find a summary of all the costs for selling an Indiana home explained in detail. I want you to be well informed and have your financial house in order so you know what to expect upon closing the sale and can proceed with your net funds to purchasing your next home or possibly renting.
Indiana Real Estate Commission
Real Estate commissions are of course the biggest expense when selling a home. It should be emphasized that commissions are not set in stone and can be negotiable from one brokerage firm to the next. An individual Realtor in one company may have a different rate from another. In many firms the commission a Realtor charges is completely at their discretion but in some cases the managing broker must approve of it first.
Capital Gains Tax
If you earn less than $250,000 on your home sale (or $500,000 if you’re married and filing jointly), don’t worry — you won’t owe a thing in the way of capital gains taxes. But if you earn more than that, you’ll want to look further into the matter. Once you’ve subtracted things like the costs of preparing the property for sale from the supposed gains, you may not owe the tax.
Example: You have a home that is worth $350,000 and you paid $200,000 for it. This means your home has appreciated $150,000 since buying it and you would not owe any capital gains taxes since it is under the threshhold of $250,000 for a single person and under the $500,000 threshold for married couples.
If your capital gain would have been $260,000 then you still may not owe capital gains taxes because after subtracting the commissions owed to your realtor as well as the other seller costs you are responsible for in closing the transaction, it’s likely your capital gain would be under the $250,000 threshold.
Indiana Attorneys Fees
I am a firm believer that every seller should have an attorney review the documents in a Real Estate transaction. The expense of having a competent attorney representing your interests is cheap in comparison to dealing with the cost of problems that could arise without proper representation.
A Real Estate attorney in a home sale can do everything from the review of legal documents such as the offer contract, the Indiana purchase and sale agreement, to attending the closing either with you or with power of attorney in hand. Keep in mind it is illegal for a Realtor to be giving legal advice.
Most buyers will have an attorney who will make changes to the standard P&S agreement. You will be putting yourself at risk without a complete understanding of the purchase and sale.
Legal representation can vary quite a bit depending on what the attorney is asked to do. As a ball park you can expect to pay anywhere from $300-$1500. Obviously you will be closer to $300-$800 on a standard purchase and sale review and closer to $1500 if you have a more complex transaction and the attorney will be in attendance at the closing for you.
Indiana Transfer Tax
Fortunately for you, there is no Indiana transfer tax on real estate transactions according to the NCSL in this table here.
Other states may require a tax, for example, of $5 for every $1,000 in value of the property. This example would mean that a 0,000 cipro online home would have a transfer tax of $1,000 (200 x $5).
The transfer tax is subject to change overtime as laws change so be sure to check with a realtor and/or attorney to ensure whether or not this tax exists for Indiana residents at the time of your sale. Visit the link above as well to see the states that require a transfer tax.
Preparing A New Indiana Deed
In Indiana it is the sellers responsibility to have a new deed prepared for the buyer that gets recorded at the registry. The preparation of a new deed is usually $100-$150 and is done by the attorney representing you or possibly the lenders lawyer if you do not have legal representation.
Buyer Home Warranty
The buyer may request the seller to pay for a home warranty or you may decide to as the seller to make the buyer feel more secure about the home purchase. This service contract covers repairs to appliances and certain systems in the home (water heater, furnace, etc.) for the first year of ownership. It usually costs around $500-$1,000 for a home warranty.
Miscellaneous Home Selling Costs
There will also be some minor miscellaneous expenses for mailing, filing fees, etc that will be added to your HUD settlement statement at the closing. These fees can include overnight mailing, courier services, wiring expenses, processing mortgage discharges and recording fees for the various documents at the Registry of Deeds. The total of these miscellaneous expenses will usually amount to a couple hundred dollars.
Indiana home selling costs are pretty straight forward when you know what they entail. Real Estate surprises however are never fun especially when they involve taking unexpected money out of your pocket! Use this list of home selling costs in Indiana to plan ahead!
Common Forgotten Expenses
Other expenses sellers often forget to consider is moving expenses, repairs requested by the buyer, and additional credits given to the buyer on the HUD statement.
When selling your home, you’ll likely need to rent a moving truck to box all of your household items into and move to your next home. If you don’t have another home purchased and ready to move into you may have to pay for storage costs until you can move your items in to your next home. Remember to estimate your costs involved with moving homes.
Repairs may need to be made depending on the inspection report that comes back. The buyer may request you to make the needed repairs but often times you will just credit the buyer the expected cost of these repairs and the buyer will use these credits to pay for the repairs on his/her own terms to keep the transaction moving forward and not be held up by repairs if they are minor. Major repairs may push back closing or cause a buyer to back out of a contract.
Prior to listing your house for sale you may also decide to spend money on paint to freshen up the home as well as new light bulbs, window repairs, carpet cleaning, and other cosmetic repairs to improve the appearance of the home and make it more attractive to prospective buyers.
Speak to an Indiana Realtor Today
The above Real Estate information on Indiana home selling costs was provided by Kevin Foy, a top producing realtor in Northern Indiana serving the Elkhart, Granger, Mishawaka, South Bend, and Goshen areas. Kevin can be reached via email at Kevin@TeamFoy.com or by phone at 574-536-9218. Kevin has helped people move in and out of many Indiana homes for the last 35+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in the following Northern IN towns: Elkhart, Granger, Mishawaka, South Bend, Goshen, Bristol. Middlebury, and Southern Michigan cities that are within 20 miles of Elkhart.