Closing Cost Calculator PA Seller – True Cost of Selling Your Home

Closing Cost Calculator PA Seller - True Cost of Selling Your Home

Video Transcript:

Closing cost calculator Pennsylvania Seller

Hey everybody! My name is Doug. I’m a real estate investor in Philadelphia. I run a company called Signature Properties. We help homeowners and sellers in Philadelphia who are in sticky situations and need to get cash, need to get it fast, need to get out from under a property that they’re having problems with. If any of this sounds like it could be of help to you, contact us. My team and I will get in touch with you and we’ll work something out, I’m sure, okay.

So today I want to talk a little bit about closing costs, how to calculate them and why that’s even important, why I think everybody should think about that when they’re trying to sell their house in Philadelphia or anywhere else, right. The reason this is such an important thing to consider is it helps you understand what your net proceeds are and that’s going to be the most important number. Think of that as what you would walk away with after the sale has concluded and after you’ve come out of pocket for all of your fees and commissions and so forth. Alright, so let me show you a really quick and easy way – you don’t even actually need a calculator, I’m going to show you how to do this on the fly and we’re gonna walk through an example. Alright, so let’s start off: You’re a homeowner in Philadelphia, you’re looking to sell your house, let’s say you’ve called up an agent you’re working with somebody and they’re putting it on the MLS. The first cost, the biggest cost that you know you’re gonna have, is a commission to your realtor. So let’s write that down here.

Okay, commission, usually that’ll come in around six percent. You could negotiate it but a good agent is going to be six percent so we’re just going to leave it at that. What I’m going to do here is I’m going to show you all the percentages, we’re going to add them up, okay, and give you a really quick and easy way – rule of thumb – it’s not going to be perfect, but it’s going to help you understand closing costs and selling your house.

Alright, second biggest thing and this is huge for Philly is transfer tax, okay, I think we have among the biggest in the country if you don’t know that. So if you’re a homeowner and you’re selling your house it’s typically/customarily split in half between the buyer and the seller so that four point something percent is going to get cut in half. Let’s just call it two percent for now to keep the math easy and to keep the calculation easy so this will be your transfer tax. right. And this is the tax that the city is imposing, right, in Philadelphia combined with Pennsylvania – that one percent that they tack on there too for transferring real property in the state.

Okay, next up we’ve got title fees. You’re the owner of the home and you have title fees and you’re transferring it, okay, you need some protection. So the title fees include: I’m going to include a bunch of other stuff in here and bundle it into one percent as an estimate, is going to be comprehensive of the title work, recording fees, escrow fees, etc. Everything to get the deal completely closed, alright, so already you can see this is adding up to nine percent, alright. So these are your common, I would call these you know standard or common fees, you’re going to run into these all the time. I’m going to switch colors here because what I want to show you is that there’s some more fees or costs you’re going to run into that you probably aren’t thinking about, but they’re definitely real and they’re going to come into play when you go to list your house with an agent, right.

What about repairs and cleaning? So let’s write that down. I’m gonna put a half a percent. Why? I’m putting a half a percent because it’s probably going to be repairs that are going to come into play. You get a home inspection done the new buyer does at least, right, for getting the property ready, getting it appraised and so forth. And they find a couple things: a cracked floor joist or a leak in the roof and easily a half percent of the property’s value could go like that, okay.

And the next and last thing I’m going to put down here just to be conservative is holding cost while you list the house so this is the interest on, if you have a mortgage, this is a continuation of your HOA fees, your property taxes…So I’m going to put another half a percent for holding costs, okay. You could list your house with a realtor, you could have holding costs of 30 to 60 days before you get under contract and another 30 to 60 days for that to close. You know you’re easily looking at the most maybe even a half a year or so. So you definitely want to take into account the interest and all the other fees to keep the property running up and going okay. So you could easily see, right, let me go back to my other marker here, this adds up to ten percent! So you don’t even need a calculator. The rule of thumb is just assume ten percent in Philadelphia. Today, in April of 2022, average sale sales price of a home is $265,000. So let’s write that down here.

So you could just assume $26,500, right, is going to be your closing costs on a property? Now why is that important? Alright, we talked about the beginning net proceeds, right, so you want to understand that when you sell your house. It’s going to be $26,500 lower in this example here, but what if you didn’t do this? What if you didn’t take this traditional approach, let’s call this traditional.

And let’s switch colors again, sorry for all the colors, and what if you did this with somebody else? With an investor like myself, like my company, Signature Properties, okay.

Closing Cost Calculator PA Seller
Doug from Signature Properties – Sell Your House Fast in Philadelphia without closing costs!

Well, we’re not realtors, we’re not agents, we’re not going to charge you a commission. You don’t pay that! We’re going to pay your transfer taxes for you. So this is zero. This is zero…we’re gonna pay your title fees for you, you’re not gonna pay anything, you’re not coming out of pocket. So all of these are gonna be zero. You don’t need to certainly clean the place or repair it. That’s what we’re gonna do! And we’re gonna do this really quick. We buy houses really fast in Philadelphia so you don’t have to worry about this holding costs for a while.

So all of a sudden, you’re not paying that $26,500 on your house in Philadelphia…and that’s a huge difference. And you know when people start to compare options they should think about this more. It’s not an apples to apples to say that an investor offered me $265k on the house, but if I list it with an agent, for you know, a different number or higher number – you just can’t compare like that until you get to your net proceeds at the bottom. You subtract out that 10% for going the traditional route.

So there’s a lot of value in working with an investor and I encourage you to kind of open up your options and think about that a little bit more, because working with me at Signature Properties, you’re going to have no additional costs out of pocket. It’s just money coming to you, right, for your house. I can’t say that’s true for all cash buyers in Philadelphia and everywhere else, but it’s true for my program and my cash offer.

Alright, so this is important to understand. If you’re looking to sell your house, if you’re not even in a sticky situation and you just want to know what your options are: give us a call reach out to us even if you’re pressed for time and you need to get this done quickly, you should think about this, right? It’s a lot of money, ten percent, you don’t need a calculator to do this! It’s very easy – just ten percent of whatever you think the sale price would be. If you’re working with a broker, they can help you understand that too.

Alright everybody, thank you for your time. Again my name is Doug. I’m a real estate investor in Philadelphia and I run a company called Signature Properties. If this is of any interest to you or if you want to learn more about any of this contact me, call me, fill out a form on my website.

I’d be happy to get in touch with you! Thanks!

Doug Greene

Doug Greene is a creative real estate investor, master content curator and evangelist for easier, better and more enjoyable real estate experiences for all. He owns Signature Properties, a Philadelphia real estate company that solves unique problems for homeowners and investors. His work has been featured on Yahoo Finance, AOL, Family Handyman and many more authoritative publications.

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