So, you’ve decided to sell your house. After the lengthy process of updating and listing, you finally have an offer! The buyer wants you to cover closing costs.
You’re thrilled with the offer but wonder to yourself, how much are closing costs in North Carolina? After all, you don’t want to agree to pay for something until you know how much it will be.
The term closing costs refers to a number of fees involved in transferring ownership of your home. Closing costs in North Carolina average 1.05% of the home purchase price.
You may not be able to calculate the exact cost. However, you should be able to get a pretty good idea of what they might be. Keep reading to find out what closing costs are and how much they might be for your home sale.
Lender fees usually only apply to someone taking out a new loan. Unless you’re selling your home to a cash buyer, the buyer will be charged lender fees by their mortgage lender.
Since buyers sometimes request sellers to cover all or part of closing costs, it’s important to understand fees your buyer will incur as well.
These are fees charged by the financial institution or bank lending money. For example, if your buyer takes out a loan through Wells Fargo, Wells Fargo will charge your buyer origination fees for that loan.
Average origination fees are about 0.5% to 1% of the loan amount. If the buyer is taking out a $400,000 loan, expect to pay origination fees of about $2,000 to $4,000. Even though origination fees are buyer closing costs in North Carolina, you may pay some or all of these fees depending on your purchase agreement.
A home appraisal will tell you the value of your home as it is. Most lenders need to know the home’s value in order to lend money to your buyer.
The state of North Carolina has a fixed appraisal fee of $325.68 for a single-family dwelling. Home appraisal costs are added to the closing cost total amount.
Home Inspection Fee
Home inspection fees reassure the buyer and lender that your home is fit to sell. If a home inspection finds an issue with your home, the seller may request money to repair it, or back out of the sale. Many times, purchase agreements have a home inspection contingency.
A 2,500 square foot home in North Carolina will cost homeowners $400 to $500. In highly competitive markets, some home buyers may waive the inspection in their offer. In these cases, seller closing costs in North Carolina do not include a home inspection.
An escrow account is set up by a third party to hold or secure funds between a buyer and a seller. Not all home sales require escrow accounts but most do. Escrow accounts usually hold earnest money. They’re also used to pay out property taxes and homeowners insurance.
Homes carrying a mortgage usually incur a courier fee. This happens when payoff funds are transferred to the existing lender. If you’re lucky enough to be mortgage-free, you won’t have a courier fee included in your closing costs.
If you choose to work with an attorney on your home sale, expect to pay anywhere between $600 to $1,000. Sellers aren’t required by the state of North Carolina to employ an attorney for home sales.
If you’re selling your house without a realtor, it may be a good idea to hire a lawyer. If you aren’t a real estate expert, you could miss legal or state regulations. These mistakes could end up costing you more on or after closing day.
North Carolina property taxes are one year behind (arrears). This means you’re actually paying last year’s property taxes this year. On closing day, the amount of property taxes you owe will be pro-rated.
Property assessment value is used to determine the amount of taxes on properties in North Carolina.
NC Transfer Tax
The state of North Carolina requires a charge rate of $1.00 for every $500.00 of the home sale price.
If, for example, your home is selling for $400,000. You, as the seller, are required to pay the state of North Carolina $700 upon the sale of your home.
Title searches ensure a clean and clear property title. A clear title means there aren’t any liens against the home. It also verifies property history.
Home sellers in North Carolina can expect to pay $75.00 to $100.00 for a title search.
An estoppel fee applies to those who have association or condo dues. It’s usually a small fee. The dollar amount varies based on payoff agreement, dues amount owed, and dues amount already paid.
Research Association or Covenant Bylaws
If your home is in a neighborhood with dues, you may also have regulations regarding your home sale. Always review your neighborhood bylaws or covenants before you sell your home. You should also have a copy of all bylaws and dues for your home buyer.
Depending on the terms of the purchase agreement, sellers can pay an owner’s title insurance. The owner’s title insurance is an acknowledgment that you have disclosed and agreed upon purchase terms with your buyer.
If the buyers come back with any issues or claims after the sale, your title insurance can help cover the costs involved so that this doesn’t become a financial burden.
The state of North Carolina does not require home sellers to carry owner’s title insurance.
VA loans require sellers to cover pest inspections for buyers using a VA loan. Pest inspection costs run from as little as $75.00 to over $700.00. Traditional home sales usually do not require a pest inspection unless buyers request it.
In a state like North Carolina, some inspectors may recommend a pest inspection. This usually happens if they find evidence of termites or other pests.
Credit Report Fee
Financial institutions or banks lending money to your buyer need to run a credit check. Loan lenders will base the loan interest rate on their credit report findings. Credit report fees are typically $25.
Can I Avoid Closing Costs?
Unfortunately, some closing costs are unavoidable. The amount of closing costs a seller pays depends on several factors.
These include home purchase price, contingencies in the purchase agreement, buyer’s loan type, and any issues found in a home inspection.
Traditional Home Sales
Selling your home with a real estate agent will most likely result in a higher offer. You will also have more expenses with a traditional home sale. Realtor fees will be about 6%.
Your homebuyer will most likely take out a loan. This results in higher closing costs than a cash sale offer. The seller and buyer aren’t usually able to pick their closing dates with traditional sales. If you’re up against a deadline, this can be a problem.
What About a Cash Buyer?
If you decide to sell your home for cash through iBuying, you can likely avoid mortgage origination fees, transfer fees, or other lender fees. The terms of a cash buyer depend on each situation.
Some home cash buyers may be willing to waive a home inspection or appraisal, but not all. Fees like the NC Transfer tax, title insurance, and property taxes will still exist with a cash buyer.
The iBuyer Advantage
Selling a home to an iBuyer can simplify the process for sellers. An iBuyer’s cash offer will likely be less money than a traditional offer. However, sellers will likely be able to sell their homes as-is. Homeowners have more control over closing dates and timelines with iBuyers.
Do You Want Control Over Closing Costs in North Carolina?
If it’s time to sell your home, you may feel overwhelmed by all the decisions coming your way. Before you list, do your research. At iBuyer.com, we can help you through the process.
Need to sell your current house to get that down payment on your dream home? Relocating for work and don’t want to sell your home from far away? Maybe you just don’t want the hassle of listing and showing your home.
Are you still wondering about how much you’ll spend on closing costs in North Carolina? With iBuyer, there are no hidden or last-minute fees. All costs are clearly stated before the sale.
Check out our website for an estimate of your home’s value. From there, you can view instant iBuyer offers. Contact us today to see if iBuying is right for you.