When you are buying or selling a home, there are several fees associated with the transaction outside of the main purchase price. To help give clarity to how all of those fees are paid, let’s take a closer look at how money is paid in a real estate transaction.
Fees Associated with a Real Estate Transaction
The cost of buying a home includes things like an earnest money deposit, appraisal and inspection costs, survey fees, title and title insurance fees, loan purchase fees, property taxes, HOA fees, recording fees, real estate agent fees, and courier fees. A number of these costs will be on top of the price of the home and some will need to be paid separately.
These fees will all be listed on your transaction paperwork and broken down for a home buyer on the purchase agreement when the buyer first puts down their earnest money deposit. They can be discussed at this time and some can be negotiated. Speak with your real estate agent to determine which ones are in this latter category.
Who Pays Fees in a Real Estate Transaction?
Fee payments can also be determined from the beginning of the sale of a home from the seller’s end. For example, often the home buyer will pay for everything except real estate agent fees. However, depending on the type of market the home is being sold in can determine what sellers will offer to pay for or negotiate to enhance the sale of the home.
A home buyer can also determine how some fees are paid after a home inspection. There can be some negotiating room once the inspection details have been discussed. Paying for real estate transactions can happen in a variety of ways and aren’t often exactly the same for each purchase. Both real estate agents for the buyer and for the seller can give suggestions and guidance to make good choices.
How are Funds Paid at Closing?
Real estate funds paid at closing and throughout a home sale process are often paid with a supervised wire transfer or a certified or cashier’s check from a buyer’s bank. Earnest deposit money can be paid with a personal check or transfer.
If a seller is contributing the cost of the fees for the home sale, there are a number of options from this side as well. A seller could reduce the cost of the home, pay for costs with a check from the bank, a personal check, or in some cases they might transfer money through an ACH, like Zelle. Do your research and speak with your local experts to confirm your comfort level with each.
A purchase agreement doesn’t usually list these payment options, but they are well known in the industry and can be discussed with your agent when you sign the purchase agreement.
A home buyer might need to go to the bank in-person for a check written for a large sum. Or the lender will send a wire transfer to the title company, which acts as the intermediary to disperse funds of the purchase and sale.
When Does the Seller Get Paid after Closing
The day of closing, the paperwork will be completed, the keys distributed, the buyer will need to present the funds, and the seller will typically receive their funds that day as well. As a seller, confirm with this transfer of funds if it is accessible the same day. Sometimes due to your closing time and the time cut off for wire transfers, you may not be fully funded the same day.
I realize it can sound complicated. And, it can be. Having an experienced real estate agent guiding the process can provide valuable peace of mind, and save you time and money. Make sure to stay in close touch with them.
Working with an Experienced Memphis Area Real Estate Agent
When it’s time to sell your existing home or buy a great new place, turn to a highly regarded and well-informed local real estate agent. You want someone who you can trust to give you the best advice and know-how for your new home purchase or sale. Check out my other great real estate articles to help you through your home selling and buying experience here in Memphis. Staging homes for sale is also part of my expertise. Please ask me about it when you reach out.
Take a minute to learn more about me. With 20 years of top-notch service for my clients, I can guide you with your house sale, new home purchase, or buying a great parcel of land. As a top, licensed real estate agent in the Memphis area, showing you the best properties for you and your family is my goal!
Contact me at (901) 828-8919 or drop me a quick note at angie@angiekelley.com and we can speak in person about your plans and options.
