Before you decide to sell your home in Northern Virginia, find out the true cost of the selling process by understanding your Seller Closing Cost. On this page, you will find an explanation for every possible closing cost expense and walk through the process of calculating how much money you will make after all fees. This page was created for two types of sellers…
- Sellers just starting the home selling process looking for accurate reliable information about the fees associated with selling a property in Northern Virginia.
- Sellers in the middle of a transaction that realized their agent never provided them with a Seller’s Net Sheet, explained the Closing Cost, or simply stated how much it would cost to sell your home.
No matter what’s your reason for visiting this page, you’ve come to the right place.
Once you read this article, you’ll know every possible expense you will encounter when you sell your home in Northern Virginia.
My name is Abraham Walker with Ask A Walker powered Keller Williams Realty and I will be your tour guide on this page.
This ultimate guide will answer similar questions my seller clients ask about closing costs they will incur when selling their home in Northern Virginia.
To make this article, I interviewed several title attorneys in the area and reviewed multiple closing settlement statements.
There are three ways to use this Guide.
One, it is possible that you’re just on this page to quickly calculate your closing cost and find out how much money you’ll make from selling your home.
Two, you want to know everything about the closing cost you’ll pay when selling your home in Northern Virginia.
Finally, you’re not interested in reading the entire article, but you want to hear the information. Check out my eight-minute video below that will walk you through the topics covered on this page.
1. Calculate Your Homes Value
It’s essential to look at selling a home differently than buying a home. Most home buyers start their process with a quick visit to the bank to determine how much home they can afford.
You’ll start your home selling process by confirming your home’s value because the value of your home will determine how much money you walk away with at the closing table.
YOUR HOME = BANK
We’re starting with the value of your home because the most substantial closing cost (real estate commission and taxes) are based on a percentage of your home’s sales price.
Since this page is dedicated to Seller Closing Cost, we won’t spend any more time discussing the process used to determine the value of your home.
If you don’t know what you’re home is worth in today’s market or you haven’t really done a deep-dive analysis in a while that’s okay.
Fill out the following form to have us send you a FREE Home Evaluation prepared by a licensed real estate agent with 10-plus years of experience.
The Home Valuation Report will be sent to your email after you enter your contact information and email below in the following form.
2. Northern Virginia Closing Cost for Sellers
If you’re selling your house in Northern Virginia, you’ll be using a licensed company known as a Real Estate Settlement Agent (RESA).
Despite the technical term RESA, you’ll hear people refer to them these types of companies by several names:
- Closing Company
- Title Company
- Settlement Company
- Title Attorney
- Settlement Agent
Regardless of the name, this company has one job and one job only.
Make sure you get your money from the buyer.
In addition to handling the transfer of funds from the buyer to the seller, the RESA also collects money and pays expenses that are related to transferring your house to the buyer.
The next section will help you understand all associated costs.
** While this is an exhaustive list, your closing can include other items that did not make this list.
A. Calculating Mortgage Payoffs
Since you live in Northern Virginia, you understand that most homes that are purchased in our area use a 30-year mortgage from a lender.
With the average person moving every 7 – 10 years, most homes are sold with a balance on their original mortgage.
Your mortgage balance is paid off with the proceeds from the sale at the time of closing.
In most cases, your mortgage balance is the most significant expense.
Our seller closing cost calculator has an area for you to place the current balance of your mortgage.
Payoff of Home Equity Line of Credit
A home equity line of credit, also known as a HELOC, is a line of credit secured by your home.
Your home secures this line of credit and is usually tied to your equity.
Home equity lines of credit will be satisfied or paid off after the home sale process.
Our seller closing cost calculator has an area for you to place the current balance of your HELOC.
Use the space in the calculator reserved for 2nd mortgage.
How to find out the balance of your Mortgage or Home Equity Line of Credit?
The payoff balance for your primary mortgage can be retrieved by calling your lender, reviewing your balance online, or reviewing your most recent mortgage billing statement.
The payoff balance of your home equity line of credit can be retrieved by calling your lender, reviewing your balance online, or reviewing your most recent HELOC billing statement.
If you have any problems securing the balance, call your lender on the phone and have them walk you through the process of obtaining your Mortgage or HELOC balance.
Do I have to pay off my Home Equity Line of Credit to sell my home?
In most scenarios, the answer is YES you will have to pay off your HELOC to sell your home.
If you were told something different or have a special arrangement with your lender, check with them in advance before placing your home on the market.
B. Calculating Real Estate Commission
Broker and Agent Commissions represent one of the most substantial expenses to selling your home. Agent commission averages around 5.5%.
The real estate agents will share the total commission between the agent that represents the buyer (selling agent) and your listing agent. The final commission you pay will depend on who you hire.
There’s no set commission rate because real estate commissions are negotiable.
Real estate is like most service-related industries, paying the cheapest rate means that the agent you’re using to sell your home will have less money to invest in marketing your property.
I don’t recommend using the real estate commission paid as the only method for choosing an agent. My endorsement is to interview three agents from three different companies that service your area.
Please pay attention to the services they offer for the commission that they are charging. The difference in service may lead to a higher sales price and more money in your pocket.
C. Understanding Title and Settlement Charges
Title Charges are the total fees you pay to the Real Estate Settlement Agent (RESA) for completing the transfer process. The charges that will show up on your Closing Document can vary in name and price from company to company.
In researching for this article, and, especially this section, I’ve reviewed and consolidated the 10 title charges that are bound to show up from five of Northern Virginia’s Top Settlement Companies.
This article is designed to educate you (current homeowner and future home seller) about the fees that you will incur when selling your property.**
Now, let’s discuss the fees:
Deed Preparation Fee
This fee is the cost associated with writing the real estate deed to transfer ownership to the current home buyer. 4 of the 5 title companies charged this fee.
This fee is the cost of an attorney preparing the deed for the sale and legal transfer of the property from the seller/grantor to the buyer/grantee.
Of the 5 title companies, RGS is the only title company that did not charge this fee as a line item.
Settlement Fee | Closing Fee | Processing Fee
This fee is to complete the closing/settlement by the RESA. It is the highest charge in the Title Section because it is the bulk of the work done during the transaction by the title company.
The title company acts as a middleman to ensure you successfully transfer marketable title to the buyer while the seller gets released from the lien and receives any funds after the sale.
To get to a completed closing, the title company will interact with some of the following parties:
- Seller Agent (Listing Agent)
- Buyer Agent
- Land Records
- Inspectors (Home, Termite, Pest, Radon, etc)
- Seller’s Lender (existing mortgage)
- Buyer’s Lender (new mortgage)
- Title Company
- Taxing Authority
- Land Records
- Homeowner’s Association (HOA)
- Condominium Association
- Utility Company
With the number of parties listed above, you can see why making sure that everyone gets paid no easy task. Hopefully, you know why it’s imperative to pick a competent title company to help you get what you want promptly.
Every RESA charge this fee. Comparing Title Companies based on these individual fees is challenging because every title company can be creative with how fees are categorized. It’s always best to look at the total charge comparing Title Company Fees.
This fee covers the cost of preparing all the documents associated with the real estate transfer process. Here’s a complete list of the documents related to the sale that pertain to the seller:
- Closing Disclosures Buyer and Seller
- Payoff release
- Lien Release
- 1099s – How the proceeds of the transaction are reported to the IRS.
- Nonforeign citizen certificate – affidavit that says for purposes of US taxes you are a US taxpayer
Power of Attorneys was not included in the above list because they require an additional fee.
In Virginia, the seller pays for the deed preparation, and buyers pay deed recording.
RGS Title was the only company out of the five companies to charge this fee because other companies include this fee in the settlement fee. They are also the most expensive title service of the five companies used in this analysis.
Title Release Tracking
This fee is to pay the expense of managing the lien release process. The Title Company will track the lien until it is released.
Assuming you took out a loan to purchase your home, your lender placed a lien on the property to protect their interest in the property. The name of the legal document to put the lien on the property is called “Deed of Trust.”
The Deed of Trust is recorded with Land Records at your local county office. It will show up when a title search is performed on your property.
If you still have a balance on your loan, the Deed of Trust is still recorded and attached to your property. After you complete the sale of your property, the lender mentioned above SHOULD be paid from the proceeds of the sale and release the Deed of Trust from the property.
In other words, you and the property are free from the lien from the lender.
It’s not uncommon to find that a lender hasn’t removed their Deed of Trust promptly (or ever). Title Release Tracking will ensure that the lien release process is successfully taken care of on your behalf by your title company.
Another reason to be mindful of what Title Company you choose when completing the settlement process.
My analysis showed that 3 of the 5 title companies charge this fee under this category. Ekko Title includes this fee in their Release Processing Fee, and Highland Title includes this fee in their Disbursement and Release Certification Fee.
**Each additional Deed of Trust on your property will incur a Title Release Tracking fee. If you have a 2nd mortgage, you’ll pay twice as much. The same goes for Home Equity Lines of Credit.
Wire Fee | Distribution Fee
This fee covers postage and any wires performed by the Title Company. Any fees incurred on behalf of the transaction for receiving wires or sending wires are in this section.
In Northern Virginia, RESA’s are required to record the deed before disbursing funds. This process can take two to three business days to complete.
After the deed is successfully recorded in the courthouse, all funds will be disbursed. In the event you have a balance from the sale of your home, I recommend that you request a paper check versus wiring the funds to your account.
If you choose to have the title company wire the funds to your bank account, make sure you provide the company with your banking information and wiring instructions. Due to the amount of fraud in real estate transactions around wires, it is crucial to ensure you’re communicating to the right party.
Always, always, always, verify that you’re talking or speaking with a representative from the title company before giving out any financial information.
Of the five closings used in this article, only 2 of my clients choose to receive their proceeds through a wire transfer. Universal Title Kingstowne had the highest fee for this service.
Electronic Storage and Access Fee | Digital Archive Fee
This is money you pay to gain electronic access to your documents. This fee is not a standard feature offered by all the RESA’s used in this article.
Monarch Title is the only company that offered this service for $25.00.
Disbursement and Release Certification
This fee covers two expenses that are previously mentioned. The Wire Fee | Disbursement Fee and Title Release Tracking Fee. Ekko Title is the only RESA that charges this fee.
Seller Delivery Fee | Processing Fee
This is money you pay for the courier service that delivers the deed and lien release to the courthouse or land records.
Ekko Title is the only company that charges this fee and based on the prices offered by other RESA’s; they include this charge in their Deed Preparation fee.
Digital Archive Fee
While Ekko Title is the only company that charges this fee, they are also the only company that itemizes most of their fees to make it easier to compare their services and offerings to other title companies in the area.
This fee will pay for the Ekoo Title to maintain a digital copy of your records. Most RESA’s include this charge in their Deed Preparation fee.
Release Processing Fee
Ekko Title is the only company that charges this fee. This fee does the same thing as the Title Release Tracking mentioned earlier in this article. Ekko Title tracks the lien process in-house versus using a 3rdparty vendor.
Despite this fee costing almost twice as much as other RESA’s, Ekko Title’s total price for Title Charges is 2ndlowest out of the five companies.
How much will you pay in Title Charges?
Title Companies are also known as Real Estate Settlement Agents have one of the essential jobs in the real estate transaction.
From my analysis of past closings from 5 of Northern Virginia’s Top Title Companies, you can expect to pay from the mid $600’s to as high as $1,000.
Highland Title offered the least expensive fees at $649 while RGS Title was the highest at $1,020. Here’s a breakdown of the total fees charged by each title company used in this section:
D. Government Recording and Transfer Taxes
The government gets you going and coming when it comes to owning real estate.
You pay recording and transfer taxes to purchase a home, and now you have the privilege of paying similar government taxes to sell your home.
There are two taxes you’ll pay to complete the sale of your property. Let’s discuss what they are and how to calculate the tax.
Grantor’s tax | Transfer tax
This is a tax you pay to transfer your property in the Commonwealth of Virginia. The grantor’s tax provides revenue to fund transportation projects across the Commonwealth.
To calculate your expected Grantor’s tax multiple the expected sales price by 0.10%. You will pay $1 per $1,000 per thousand.
Your tax will be $500 when selling a house for $500,000.
What is WMATA Capital Fee? (formerly known as Congestion Relief)
WMATA stands for Washington Metropolitan Area Transit Authority. The state’s website describes the fee as a transportation network that’s vital to the economic growth of Northern Virginia and the Commonwealth.
To calculate your expected WMATA Capital fee multiple the expected sales price by 0.15%.
You will pay $1.50 per $1,000 or $750 when selling a home for $500,000.
Congestion Relief (for info only)
Effective July 1, 2018, the Congestion Relief tax was renamed “WMATA Capital Fee.”
You can find out more information on why the name was changed by visiting http://virginiageneralassembly.gov website and searching for Senate Bill 856 for the 2018 Session.
E. Deposits, Credits, and Debits
Prepaid taxes, Home Owner Association (HOA) dues, and condo dues will show up as a credit on your settlement statement. You’re only responsible for these expenses while you’re the owner of the property.
For example, assume you pay your HOA every month. You sell your house to a new homeowner who takes possession on the 15thday of a 30-day month.
You will receive a credit at the closing for the unused portion of the HOA dues because the new owner takes over those responsibilities.
This dollar amount will show up as a reduction to your bottom line on your Closing Document because you are contributing money to the buyer from your net proceeds.
Seller contribution benefits you because it allows buyers to purchase houses with less cash on hand.
Seller contribution limits are predetermined by the type of loan the buyer uses. Here are some of the seller contribution limits for the more popular loan products:
- Conventional financing – 2% to 9% of the sales price (depends on the intended use of the property and down payment amount).
- FHA – up to 6% of the sales price on owner-occupied homes.
- VA – up to 4% of the sales price on owner-occupied homes.
- VHDA – this isn’t a mortgage instrument and thus does not have down payment restrictions. Whatever the underlining mortgage product being used on the property will determine the down payment assistance limit.
- USDA – up to 6% of the sales price on owner-occupied homes.
In a buyer’s market (when houses take six months or longer to sell) sellers may offer seller contributions as an incentive to purchase their home over others on the market.
During the home inspection, HOA Inspection, or Condo Inspection, deficiencies may be found that require repairs that the buyers request you to remedy. Instead of making the requested repairs, sellers have the option of reducing the sales price or offering a seller contribution.
Unless the buyers are paying cash for your property, it’s more advantageous for them to accept seller contributions.
F. Miscellaneous Settlement Charges
You’ll want to pay extra attention to this section of your closing fees because these charges are usually at the very bottom of all closing documents. The items contained in this section are here because they are infrequent to most real estate transactions.
Due to the small-dollar figures and rarity of occurrence, the next section will contain a brief overview of the fees from my research with a highlight or two of the areas you may want to pay attention to or ask questions.
Most of the fees fall into two groups, HOA Fee | Condo Fee, and, Fee or Charges Paid at Closing.
HOA Fees | Condo Fees
Selling a home located in an HOA or Condominium means that you agreed to abide by the rules of the development when you purchased your property. You are guaranteed to see a closing fee associated with your home sale because of the additional work of the Association or Development to process your property transfer.
The name of the fees varies between the different associations. The most common fees the association will charge you include the preparation of the association documents. The buyer of your property will review these documents during the home sale contract period.
Some associations will also include a charge for an exterior inspection of your property. This inspection will ensure your property is not violating any terms or laws set forth by the association.
Here are just a few of the names used on the Closing Document:
- HOA Transfer Fee
- Discovery Fee
- Move-In Fee
- Move Out Fee
- HOA Resale Document Fee
- HOA Resale Disclosure Fee
- HOA Processing Fee
- HOA Resale Package Fee
The fee your association charges for the above services is located in the association package you received when you bought your property.
To get the most current fees, we will contact your association before placing your home on the market to get an idea of what’s required to complete the transfer process.
Fees or Charges Paid At Closing
Some services or charges required to sell your home occur after the house is under contract.
One of the most common costs you can anticipate paying is the Termite Inspection Fee when the buyer is using a VA loan to purchase your home.
Here’s a list of other Fees or Charges that were paid at the closing:
- Termite Inspection
- Termite Treatment
- Home Warranty
- Real Estate Agent Flat Fee*
**Be careful about the listing agreement you sign at the beginning of the transaction. You may have agreed to pay your agent an additional commission called, “Flat Fee,” without understanding the charge.
Agents have been known to charge their clients as little as $395 to as much as $2,500 in this section of the listing agreement. Seller beware.**
READ YOUR LISTING AGREEMENT BEFORE YOU SIGN IT.
3. Northern Virginia Closing Cost: Math Breakdown
Now that we know the names and description of the closing costs that are available, let’s walk through an example and break down the math:
The following closing cost estimate is based on a Fairfax County, single-family home with a sales price of $500,000. This example will make the following assumptions:
- 6% real estate sales commission
- $5,000 seller contribution
- Property is in an HOA that charges $250 for an HOA Resale Package
The following example is only meant to show you what to expect at closing.
For a more accurate estimate, please send me an email with your address to [email protected].
4. How Much Money Will I Make From Selling My Home?
If you’ve made this far in the article, you’re ready to use our Net Proceeds Calculator. With this calculator, you will help you determine how much money you can expect to put in your pocket.
5. Find a Northern Virginia Title Company
The buyer has the option of selecting the title company on the contract; this doesn’t stop the seller from choosing a different title company to complete your side of the transaction.
This step will allow you to control your closing cost expense.
The process of selecting a separate closing company for the seller side of the real estate transaction is called “split settlement.” Split Settlements are unique to Northern Virginia.
Minimizing your closing cost isn’t the only reason to request a split settlement. The location of the buyer selected title company also plays into the selection process of choosing a title company.
It isn’t uncommon to sell your home in Fairfax County to a buyer from Woodbridge who selects a title company in Woodbridge.
Now you know as much as a real estate agent when it comes to seller closing costs.