Everything You Need to Know About Closing Costs in Minnesota
When you’re selling a home, you’ve got plenty of important details on your mind. One aspect of the process that can be difficult to understand for many home sellers is the expenses associated with closing costs.
Unfortunately, those costs can add up quickly, and if you’re not planning for them, they can amount to an unexpected surprise. In this post from our cash home buyer team at Bill Buys Houses, we’re breaking down everything you need to know about closing costs in Minnesota.
Contact Bill to find out more about selling your house fast for cash today!
What Happens During the Closing Process of Selling a Home?
The closing process is the final phase when selling a home. During closing, buyers and sellers will typically sit down with a third-party representative overseeing the signing of documentation and ensuring the process goes smoothly.
Most people associate closing with the closing table, where all of the paperwork gets finalized and the transfer of ownership is completed. The following steps are taken during the closing process of a home:
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Sign the purchase offer
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Open an escrow account
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Conduct a title search and insurance
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Allow for further inspections
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Hire a professional for the final appraisal
This entire process can take place over several weeks or months, depending on the speed of both parties. The average time it takes to sell a home is 45 days. That can be a long process if you’re in a bad situation.
What Are Closing Costs?
During most home sales, both a buyer and seller will be required to pay closing costs that cover the expense of services and documentation associated with closing:
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For sellers, this typically ends up being between 1 and 3% of a home’s selling price and mainly pays for expenses associated with the transfer of ownership.
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For buyers, the costs are a bit higher at between 3 to 4% and generally cover lender fees.
Additionally, sellers will also need to pay any commission fees. In Minnesota, those average out to about 6%.
Calculating Your Closing Costs
Although you can’t know precisely what your closing costs as a seller will be until you begin the process, you can use a simple formula to anticipate what they may come to: Find out what your closing costs will be, and then simply multiply that percentage by the overall selling price of the home.
For example, if your anticipated closing costs are 3%, you will multiply the home's selling price by .03.
To get a better idea of how much the average closing costs might be in Minnesota, let’s take a look at Minnesota’s typical home sale price. According to Zillow, Minnesota home values have increased more than 9% during the past year, with a typical home value of around $292,000.
Using this average price as a guideline, we might expect to see the seller’s closing costs of between $2920 and $8760. On top of this, if we’re paying a 6% commission rate to an agent, we’ll need to add around $17,520.
Altogether, your commission costs and closing costs will come out to a grand total of $26,280 for an average Minnesota home.
What’s Included in Closing Costs?
These are rough examples of some of the fees you’ll typically see included in a seller’s closing costs on the average Minnesota home, but they are important to keep in mind.
Home Inspection: $385
You’ll need to pay for a home inspection for the buyer and the buyer’s lender. During this inspection, an inspector will thoroughly examine the condition of your home to identify any problems.
Expect the inspector to look at a home’s insulation, HVAC system, structural condition, plumbing, drainage, foundation, roof, walls, doors, windows, wiring, and more.
Title Insurance: $1000
Imagine buying a home and then learning that the seller did not have the legal authority to sell it. Title insurance protects the buyer against this and other potential problems related to the title of a property.
Title Search: $300
The buyer’s lender will request a title search to make sure you’re the rightful owner of a property and there are no existing legal issues with a home, such as mechanical or construction liens.
Property Survey: $500
A property survey is needed to determine and verify the legal description of the property a home sits on. This can include details such as boundary lines, easements, building locations, hazard areas, and elevation.
Appraisal: $400
During the appraisal, an appraiser will determine the property’s fair market value based on a number of factors.
These can include but are not limited to:
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the home’s structural integrity
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any improvements or upgrades
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obvious defects
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the home’s overall condition
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total property area
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chimney, roof, and gutter condition
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foundation
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curb appeal
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landscaping
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driveway space and condition
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garage
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number of bedrooms and bathrooms
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square footage and amount of livable space
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condition of the HVAC system
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appliances
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existence of lead paint or asbestos
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energy efficiency
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electricity and plumbing
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general home upkeep
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evidence of pests or pest damage
Mortgage Payoff: May Vary
If you still owe a balance on your mortgage, you’ll owe this at closing. Keep in mind that some lenders charge a penalty for paying off a loan ahead of term. Loan payoff costs will also be included.
These include the buyer’s loan origination fees, prepaid interest, and application fees, typically averaging 0.5% to 1.5% of the total sales price.
Additional Costs
In addition to the above costs, you may also be expected to cover recording fees, attorney fees, property taxes, HOA fees, and utilities during closing.
How to Sell a Minnesota Home Fast Without the Hassle
If all of those numbers are a bit overwhelming and you’re ready to sell your house fast for cash, our cash buyers at Bill Buys Houses can help!
No matter what type of home sale you’re looking for, you no doubt are looking for an established realtor with the knowledge and expertise to get you the most value for your home. This is especially true if you’re looking to sell your house fast for cash.
While several trustworthy and reputable real estate companies specialize in these types of sales, like our team at Bill Buys Houses, that’s not the case for all companies. Through our expert services and commitment to our customers, you can rest assured knowing you will get the best care possible. We are local to Minnesota and understand the markets better than any out-of-state company, which means you’re going to get the best deal possible for your cash sale.
If you find yourself in any of these stressful situations, Bill Buys Houses can help you get the cash you need from your home.
Homes Not In Good Condition
If your home won’t pass an inspection or is in relatively bad condition, Bill Buys Houses will still purchase your home for cash. The bad condition can be from neglect or a weather-related incident, for example. If you are worried about your insurance covering the costs for repairs, consider contacting Bill Buys Houses.
You Need Immediate Cash
If you need to unload a home in your name and you need immediate cash, Bill Buys Houses can help. Whether you’ve fallen on hard times or you’ve inherited a house you need to sell fast, Bill Buys Houses understands. We can help you get out of this stressful situation quickly.
Low Appraisal
If your home came in with a low appraisal value, but you still need to sell your home, consider selling it for cash. Bill Buys Houses can purchase your home for cash despite a low appraisal.
You Need to Move Now
If you need to move immediately, you don’t have time to deal with the long home-selling process. Sell your home for cash and move within your timeline without hiccups.
What Makes Bill Buys Houses the Best Choice?
So, how does Bill Buys Houses stand apart from the rest? How do we do more to ensure each of our customers is satisfied and feels confident knowing they have a strong team behind them to ensure they have everything they need?
Let us count the benefits of selling your home for cash with Bill Buys Houses.
Faster Process
If you need cash within 45 days, then consider selling your home for cash. The closing process for cash sales is much quicker than traditional sales, which means you’ll have cash on hand almost immediately.
Once you accept our offer, we’ll get started with getting you your money and typically can have your sale closed in a week.
Fewer Expenses
Above, we listed out all the expenses that come out of your home sale. Skip the nonsense and sell your home for cash. The closing process will be much cheaper this way, and you don’t have to dish out thousands of dollars for extra services.
Guaranteed Sale
We won’t stiff you on a sale. You don’t have to worry about accepting an offer on a home only to have the buyer's mortgage options fall through. You’ll receive a cash offer from us no matter the condition of your home.
Licensed Officials
When you see signs on the side of the road that advertise supposed companies buying ugly houses for cash with just a phone number to contact, how are you supposed to know if they’re reputable? When you come to Bill Buys Houses, you’ll rest assured knowing that you have professionals on hand who know what they’re doing, and it’s not a scam.
Each of our employees is a licensed and certified real estate professional. With this, we can easily start and close any sale, making us the top-notch real estate company in this field. Many times, people who claim to buy and sell houses fast and for cash aren’t certified and are simply looking for a way to prey on an innocent family who needs to get rid of their house quickly. However, our real estate team is professional and licensed.
Years of Experience & Compassion
After spending years in the traditional real estate business, we saw a need for kindness, compassion, and honesty for those who can’t use the traditional real estate model. We built our cash real estate model using what we learned to make it better and more applicable to everyone.
Not everyone can go through the traditional real estate process where you pay commission fees and go through a lengthy process that involves investing a lot of money into your property to make it easier to sell. We know how difficult it is to make that investment when you’re strapped for cash. However, we took away all of those gimmicks to ensure you get what you need.
Backing of Investors
One of the things that truly sets Bill Buys Houses apart from other real estate professionals who specialize in our specific niche of real estate is that we have the backing of a team of investors. These investors are all local community members with strong financial backgrounds. These community members are well-respected and held in high regard as our trusted business partners.
As soon as we have agreed to an offer with you, we will immediately call our investors to get the transaction started. Within a day, we’ll have the money ready for you and have cash in your hand. Not many other real estate companies have this type of financial backing, and they can’t complete your project as quickly.
To learn more about our financial backers, contact us today.
Sell Your Home for Cash Today With Bill Buys Houses
Contact Bill Buys Houses today if you’re in the Twin Cities metro area and looking for a licensed real estate team to help you sell your home for cash. Since we opened for business, we have helped countless customers get what they need through our unique home-selling process.
To learn more or get an offer today, give us a call at 651-270-9191.