When selling your Massachusetts residential single family home or condominium unit, one of your first questions will be "how much of the sale price will I actually receive when all fees and taxes have been deducted?" This question will eventually be answered when the closing attorney drafts the HUD-1 settlement statement- but this often happens within a day or two of closing. So, we have devised a simple spreadsheet to calculate a very close estimate of the net proceeds of sale to the seller of real property.
CLICK Here for an example spreadsheet. Feel free to call or email for a customized spreadsheet based on the particulars of your transaction.
Generally speaking, the main expenses of the sale are the following:
Broker's commission: 5%-6% is the common range for real estate broker fees in Massachusetts. Customarily, the seller will pay the full amount of the commission, with the buyer's agent receiving a 50% share of the commission. Of course, it is possible to consummate a sale without the aid of 2 real estate agents, but in the majority of transactions, it is the efforts of two agents working together that result in a mutually satisfactory deal.
Mortgage Payoff: You will need to obtain a Mortgage Payoff Statement from your lender, which will provide the exact amount due to release the mortgage lien as of the day of closing. In Massachusetts conveyancing practice, the closing attorney allows three business days after closing for processing the file and sending the payment in by courier or wire. This Mortgage Payoff Statement is different from your monthly statement: the Payoff Statement makes reference to a specific "good through" date, to which daily interest charges are calculated.
Deed tax: Calculated as $2 per thousand of the consideration stated in the deed- ie, the sale price.
Seller's counsel fee: ranges from $800 to $1200 or so for the normal residential transaction
Discharge tracking fee: $100-$150: If you have one or more outstanding mortgages on the property, the closing attorney's office will often charge this fee in consideration of their obligation to ensure that your mortgages are fully paid off within 3 days of closing and the proper lien release documents are recorded at the Registry of Deeds.
Recording fees: $75-$225. Depending of the circumstances: if you are selling a condo unit, you will pay $75 to record a 6D certificate of no unpaid common charges, each mortgage discharge is $75, etc.
Final water bill: varies, usually $40-$200. At closing the amount of any water and sewer bills will be deducted from the proceeds of sale and used to pay the bill in full. Usually this will not be charged to you for a condominium sale, as the water bill is customarily a common expense and as such, paid by the condominium trust.
Credits back to the seller:
Prorated, prepaid property taxes. In most municipalities, taxes are paid quarterly, due on the first day of the second month of the quarter. Thus, if you close on Feb 15th, you have already paid the tax bill for the period from January 1 to March 31st. Thus, the buyer will credit back to you the prorated amount of the tax bill from Feb 15th to March 31st.
prorated, preapid condominium monthly fee. Condominium fees are due on the first day of the month, so you will have prepaid the fee if closing on any day other than the first day of the month: in which case the buyer will have the obligation to pay the fee for that month.
Value of fuel oil in tank, if applicable. You will need to obtain a reading by your fuel oil supplier of the value of the remaining fuel in the tank.
To obtain our estimate, we simply add up the total credits to the purchase price, then subtract out all of the fees and expenses. You should be aware that all disbursements out of the proceeds discussed above will be made by the closing attorney (aka settlement agent), so that as the seller you will not be responsible for paying off the balance of your mortgage, final water bill, etc. Please refer to our spreadsheet for a useful tool to use for your own sale.