As the old adage goes, you gotta’ spend money to make money, and this is true when selling a home.  Some of the expenses of selling a home are spent in order to get a higher price or an offer on a home. Others are expenses that fall under the term “closing costs,” and they can be incurred by the seller or the buyer. In Arizona, the sellers of a home have to pay half of escrow fees, all of the sales commission, owed property taxes, title insurance, and the home warranty if one exists.

A Bit About Closing Costs

Escrow Fees are also called closing fees, and they rise as the cost of the home rises. For example, it may be 2 dollars for every thousand dollars that a home cost. These fees are paid to the title company or whoever handles the closing. The party that oversees the closing must be independent from the home purchase.

Sales commission is paid by the seller in Arizona, and it is decided before selling the home and based on the gross sales price and an agreed-upon percentage.  It is paid out of the proceeds made from the sale.

Owed property taxes must be paid by the seller, and they can be prorated to fit the actual portion of the taxes that would be owed during the seller’s occupancy/ownership of the property. While this seems fair, some states do not prorate, and whoever owns the home when taxes are due pays the full year.

Home warranties are paid by the seller in Arizona, and they are included in closing costs. Home warranties offer peace of mind to home buyers who fear major home systems breaking down immediately after purchasing the home. These warranties don’t cover everything, but they cover major appliance like dishwashers and oven, and they cover major systems like air conditioning and telephone wiring.

There’s more to it than closing costs.

There are other closing costs that impact both the seller and the buyer, but it is not the only thing a home seller needs to consider when planning the expenses involved in selling a home. Often, if a home is in disrepair, it must be repaired before it will pass an inspection. If there are unsightly areas of a home that have not been maintained, a homeowner may have to invest in paint or flooring. New windows make a home easier to sell. While closing costs are less negotiable, a homeowner can weigh the benefits of making these repairs versus lowering the value of the home. Sometimes a minor amount of money can lead to major value increases.