Essential Information on Closing Costs for Home Sellers in the St. Croix Valley

Selling a home is a big moment, but there are expenses involved that you might not expect. Picture this: you’re at the closing table, thinking you’ll get a good chunk of money, only to find several thousand dollars being deducted. These are closing costs, and if you’re not ready for them, they can reduce your earnings more than you'd like.

This post breaks down the costs sellers typically pay in the St. Croix Valley, why these costs exist, and how to hold onto more of your money when selling your home.

What Are Closing Costs?

Closing costs are the final expenses you pay to complete your home sale. These include everything from real estate commissions to legal fees. On average, sellers pay 6% to 10% of the home’s sale price in closing costs.

Being aware of these costs in advance can help you budget effectively and avoid surprises at the last minute.

The Most Common Closing Costs for Home Sellers

1. Real Estate Agent Fees

Real estate commissions remain a key expense for many sellers, but recent changes have made them more flexible and negotiable. Sellers are no longer required to cover the buyer’s agent commission, and all commission agreements must be clearly disclosed and agreed upon upfront.

How Much Do Commissions Cost?

Traditionally, commission rates ranged from 5% to 6% of the sale price. However, with the new rules, commission structures vary more widely and are subject to direct negotiation between sellers, buyers, and agents.

Who Pays the Commission?

• Sellers may still choose to pay the buyer’s agent commission, but it is no longer an industry standard.
• Some buyers may now be responsible for paying their own agent’s commission.
• Listing agents still charge a fee for marketing, negotiations, and transaction management, but the rate is now more customizable.

2. Transfer Taxes and Recording Fees

Transfer taxes are state and local fees for legally transferring ownership of your home. In the St. Croix Valley area, these taxes vary but are an important cost to consider.

• How much do transfer taxes cost? Usually between 0.5% and 2% of the sale price.
• Who pays these taxes? The seller usually covers these costs, though in some cases the buyer may share the burden.

3. Title Insurance (Owner’s Policy)

Title insurance protects buyers against ownership disputes or legal claims on the property. Though the buyer typically gets their own policy, many sellers in the St. Croix Valley pay for an owner’s title policy as part of the deal.

• Is title insurance mandatory? No, but it's often expected in a home sale.
• Cost: Usually 0.5% to 1% of the home’s sale price.

4. Escrow and Closing Fees

Escrow companies manage funds and documents to ensure a secure transaction. These fees cover the final paperwork involved in transferring ownership.

• What do escrow companies do?
• Hold funds in a secure account.
• Ensure all contract terms are met before transferring money.
• How much do these fees cost? Between $500 and $2,000, depending on your location and provider.

5. Prorated Property Taxes

Since property taxes are yearly, you’ll have to pay your share up to the closing date. In the St. Croix Valley, property taxes can vary depending on the municipality.

• How is it calculated? The annual property tax bill is divided by the number of days you owned the home that year.
• Example: If annual property taxes are $6,000 and you sell halfway through the year, you owe $3,000 in prorated taxes.

6. Homeowners Association (HOA) Fees

If your home is part of an HOA, there are extra fees at closing.

• Unpaid dues: Any outstanding HOA fees must be settled before closing.
• Transfer fees: Some HOAs charge between $200 and $1,000 just to process the ownership change.

7. Attorney Fees (If Required)

In some states, you are required to hire a real estate attorney to review and finalize the sale. This is something to be aware of if you're selling in the St. Croix Valley.

• Cost: Typically $500 to $1,500.
• What do they do?
• Review contracts and closing documents.
• Ensure everything is legally sound.

How to Reduce Your Closing Costs

Closing costs can take a sizable chunk out of your home sale profits, but the good news is that there are ways to cut back on these expenses. Whether through negotiation, strategic choices, or finding cost-effective service providers, you have options to keep more money in your pocket. Here are some practical ways to lower your closing costs as a seller.

Sell Without an Agent (FSBO) — this means no listing agent commission. However, you’ll still need to:

• Pay the buyer’s agent commission (usually 2.5% to 3%).
• Handle marketing, negotiations, and paperwork yourself.

FSBO works best if you have experience in real estate or a buyer already lined up.

Ask the Buyer to Cover Some Costs

• In some deals, buyers agree to cover certain closing costs instead of negotiating a lower sale price.
• This works best in a seller’s market, where buyers compete for homes.

Shop Around for Service Providers

• Get multiple quotes for title insurance, escrow services, and attorneys.
• Some companies offer discounts for bundled services.

Preparing for Closing

As you approach the finish line of your home sale, there are still a few final steps to take before closing day. Proper preparation can help avoid last-minute surprises and ensure everything goes smoothly. Here’s what you need to do before handing over the keys.

1. Review the Closing Disclosure Early

• You’ll get a Closing Disclosure a few days before closing that lists all costs.
• Review it carefully to catch any unexpected charges.

2. Finalize Repairs and Paperwork

• Complete any agreed-upon repairs before closing.

Make sure liens, HOA fees, and taxes are paid to avoid delays.

Final Thoughts

Selling a home involves more than just finding a buyer. Closing costs in the St. Croix Valley can add up, but knowing what to expect and planning ahead can help you keep more of your profit. Understanding these costs can lead to a smoother and more successful sale process.