Who Pays Closing Costs in North Carolina?
The state of North Carolina has benefited over the last decade or more from a bustling economy, steady job growth and relatively affordable housing compared to the rest of the US. If you’re considering buying or selling a home in North Carolina, it’s wise to explore the associated closing costs that you’ll be responsible for on closing day.
The median home price in North Carolina is about $302,000 and closing costs are dictated in part by the sale price of the property. Realtor commission fees, which are paid at closing are the largest closing cost expense for sellers in North Carolina.
Keep reading to find out which closing costs sellers typically cover in North Carolina and how much you can expect to pay for each of them.
How much are seller closing costs in North Carolina?
Seller closing costs are fees and taxes you pay when you finalize the sale of your home in North Carolina. These include the costs of verifying and transferring the title (property deed) to the buyer.
Total closing costs in North Carolina plus Realtor fees will typically average about 6 – 8% of the final sales price of the home. Scroll down to see the full breakdown of closing costs.
Closing Costs When Selling a Home in North Carolina
On the selling side, you’ll be on the hook for things like prorated property taxes, transfer taxes and real estate commissions.
Here’s an in-depth look at the closing costs you should expect to pay when selling your home in North Carolina.
How Much are Seller Closing Costs in North Carolina?
While the taxes, fees, lender charges and insurance all add up, luckily neither the buyer or seller pays 100% of all the total closing costs.
It’s good to note however, that even though you may avoid the bulk of closing costs, you as the seller will still have to cover Realtor commission costs which can add on as much as 6% of the final sales price of the home. This includes an average of 3% paid to the listing agent and another 3% paid to the buyer’s agent.
Below, we have listed some of the most common closing costs in North Carolina and how much you can expect them to be.
Common Seller Closing Costs
- Real Estate Agent Commission – typically 6% of the sales price: Assuming you intend to hire a Realtor and the buyer also engages an agent to purchase your home, you’ll be responsible for paying both of them at closing. This amount can differ greatly from one agent to another, but it is typically 3% for each agent in North Carolina.
- Prorated Property Taxes: Property taxes in North Carolina are paid in arrears. You’ll owe property taxes for the portion of the year you owned the house (be it 30 days or 300 days). They’ll be prorated based on the number of days you owned the home, so the amount you owe will be much higher for a November closing than one in early January (300 days vs. 30 days). Note: If your current mortgage payment includes an estimated amount for property taxes that they collect and put in “escrow”, then each month you should be able to get your escrow balance back after closing.
- Municipal Lien Search – $100 to $300: The municipal lien search looks into unrecorded property issues that aren’t shown in a typical title search, such as code violations, water/sewer/solid waste balances, and open or expired permits, to name a few. The cost varies by municipality.
- HOA Clearance letter – typically $200 to $500: This letter certifies how much you owe the HOA. It includes your monthly dues, as well as any special assessments, past dues, fines or other fees. The title company must confirm that you are in good standing with the HOA and current on all your dues before they can give clear title on the home.
- Doc Stamps for the Deed – varies with price of the home: Also called a “transfer tax”, this tax is paid to your local county when the deed is recorded.
- Outstanding amounts owed on the property: You’ll be responsible for any unsettled payments on your home such as utility bills through the date of closing.
Closing Costs in North Carolina
In North Carolina, buyers should prepare for several key expenses, including the loan origination fee, which is part of the average closing costs. Buyer’s closing costs often encompass fees such as title insurance, appraisal fees, and contributions to an escrow account. It’s important to note that in addition to the down payment, buyers should also factor in North Carolina’s closing costs. Typically, estimated closing costs for buyers range between 2% to 5% of the home’s purchase price, making it essential to budget accordingly for a smooth transaction.
Who pays closing costs in North Carolina?
Buyers and sellers each pay unique closing costs to finalize a home sale. In North Carolina, buyers typically pay for the title and closing service fees, owner’s title insurance policy, transfer taxes, attorney fees, and recording fees at closing. Optional costs for sellers include buyer incentives or prorated property taxes.
Buyers also pay for things like mortgage fees, appraisal, and inspection fees. Learn more about buyer closing costs.
These closing costs are only an estimate. While closing costs will always have to be paid, your real estate agent can often negotiate who pays them — you or the buyer.
If you want to get the most out of negotiations, you’ll need an experienced agent who has your best interests in mind.
Conclusion
In North Carolina, the nuances of real estate transactions can often puzzle homebuyers and sellers, especially when it comes to who bears the closing costs. Local market dynamics and the specific real estate agents involved play a pivotal role in determining these costs. Real estate agent fees are a significant part of this equation. The average real estate commission in the state can vary, but North Carolina realtor fees often align with the national average. It’s essential to understand that while some home sellers may work with traditional real estate brokers and agree to pay the standard real estate agent’s commission, others might opt for a discount real estate broker to save on fees.
When comparing the North Carolina agents charge with other states, the emphasis on value and local expertise becomes evident. Discount brokers can offer competitive rates, but the comprehensive service provided by seasoned agents often justifies the cost. So, whether you’re working with discount brokers or traditional real estate brokers, it’s crucial to factor in real estate agent commissions to understand the complete financial landscape of a sale or purchase in North Carolina.