When you get an offer on your home for sale, you’ll probably find yourself doing a mental calculation of the real estate commission you’ll need to pay, based on the specific price offered. And if you’re like most sellers, you may inadvertently overlook another significant expense of closing the sale on your home.
The additional expense you may overlook is the buyer’s closing costs, which can be expensive. A quick look at Bankrate.com provided estimated mortgage origination costs for a $200K loan in New Jersey. Including third-party fees on the $200K mortgage with a 20% ($40K) down payment, the buyer’s closing costs were estimated at $2,625.
It’s become increasingly common for real estate agents to write sales agreements including the buyers’ closing costs as the sellers’ responsibility. While it’s not really the sellers’ obligation to help the buyer pay for the privilege of borrowing money to buy the home, it is becoming a common practice to ask for it.
Since you, as the seller, are not applying for a mortgage on the home, you have to rely on real estate agents’ estimates of buyers’ closing costs when doing your mental calculations. Needless to say, this can be risky.
Other online calculators often provide much higher closing cost estimates, as do local real estate brokers when calculating both sellers’ and buyers’ closing costs. But a Good Faith Estimate of the buyers’ closing costs is not available to you when you’re faced with the decision to accept, reject or counter an offer to buy your home. Mortgage lenders are required to provide the buyers with an estimate of closing costs within three days of their mortgage application, which they won’t start until you agree to a sales price.
It’s wise to ask your lawyer to help you determine the financial consequences of any offer when selling your New Jersey home due to a divorce. When you want to avoid estimates that are ‘way off and the potential problems caused by reduced proceeds on the sale, your New Jersey family lawyer can help bring the consequences of your home sale into sharper focus for you.
Real estate agents are not lawyers. They are not thinking about the legal consequences of selling a home before or after a divorce settlement is final because it’s not really their job. Take care of yourself and get your lawyer to look over any offers on your home before signing.