How Much Are Typical Seller Closing Costs in Montana?
And how to save approximately $8,666 in real estate commissions on a typical $288,867 MT home at closing by selling your home For Sale By Owner on Houzeo
Congratulations! You’re finally going to make it—the final process of home-selling. Preparing for closing costs in Montana on a property can be a tough undertaking, not to mention the federal requirements and provisions you have to comply with. The state of Montana is probably one of the most expensive states when it comes to closing costs. Also, there are several regulations and provisions needed to get familiar with, which also makes one of the most tedious states.
As a Houzeo For Sale By Owner (FSBO) seller, we assume you are ready for closing. Our comprehensive Montana FSBO Home Seller Guide will assist you to accomplish exactly that.
In this section, we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Montana.
What Are the Different Home Seller Closing Costs in Montana?
1.Mortgage Payoff. (usual fee depends on your lender) One of the most important fees in your list is the mortgage payoff. If you haven’t paid this off, now’s the time to pay the remainder. This includes items such as the recording fee, principal balance, interest accrued from the last payment, or any statement fee the lender might charge.
2. Real Estate Broker Commissions. Real estate agent commission fees are typically on average of 6%—split between the listing agent and other home buyer’s agent. So usually, sellers have to pay 3% for the listing agent and 3% to the buyer’s agent. But if you’re selling FSBO via Houzeo, congratulations… You’ve likely to save thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.
3. Property Taxes.These are outstanding payments, or prorated property taxes, utility bills, or homeowner’s insurance that are all tied into your property. You may need to pay the buyer a prorated amount of property taxes, or the buyer may need to credit you.
4. Title Insurance. Title insurance helps provide buyers protection from any unforeseen title issues or financial loss with the property. It’s a guarantee that the buyer gets a clean property title, free of other legal encumbrances that could threaten the buyer’s interest to the property. Sellers usually pay for an average of $350 but could be more than 1% of the loan.
5. Attorney Fee. A real estate attorney is primarily responsible for all federal transactions—from preparing legal documents to taking care of statutes contracts. In the state of Montana, the cost could vary but usually in a range between $500 to $1000 or more.
6. Appraisal Fee. You can hire an independent appraiser to determine the estimated sales price of your home based on different factors. The appraisal fee can cost between $200 to $500 depending on the property size or appraisal fee in your state or area.
7. Escrow Fees: There can be a neutral third-party representative from an escrow company that handles the transfer of the deposits, documents, funds, and other key items in a closing. Usually, escrow charges $2 per $1000 in the sales price, (additional $250) which covers the services during the closing day.
8. Property Survey: Home surveys in Montana typically cost $1000 to determine the boundary of your property, and so the buyer could get an assurance of what they’re paying for.
9. HOA Dues, Document Fees: If the property falls under a Homeowners Association, you may be subject to various other charges. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow. Read here to know more about HOA in Montana.
10. Home Inspection. Depends on the location or state, you have to pay for different home inspections such as Pest Inspection, Lead-Based Paint Inspection, Radon Test, etc. Although sellers have to disclose these defects or issues, in Montana, it’s prevalent that buyers perform a home inspection to verify these disclosed defects.
11. Recording Fees. To legally document the sale and transfer of your property to the public record, you have to pay for a fee that could vary depending on the county you’re in. This can average about $100 in Montana.
12. Other fees. You also need to expect other miscellaneous fees like notary fees, title search, courier fee, process fee, assumption fee, application fee, underwriting fee, wire transfer fee, flood insurance premium, etc.
How Should I Prepare for My Montana Home Closing?
Don’t worry. Your closing agent will likely help set a date for your closing and notify you. Here’s what you need and need to do for a smooth and quick closing day.
- Review Your Closing Documents in Advance. Make sure you prepare your closing documents before the scheduled closing date. Read and review the documents—especially the federal papers—thoroughly and understand their provisions and highlights. To help you get familiar, here are the key documents that you’ll probably sign at the closing date.
- The HUD-1 or Closing Disclosure. If your Montana home is purchased with a mortgage, you’ll need to get the Closing Disclosure summarizing the costs in detail. But if your transaction is all cash, you may get the HUD-1, although this is less common. These documents detail amounts you’re being charged for, your loan payoffs if any, and the net proceeds you will take to the bank. Remember, depending upon how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date.
- Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors – this is one of the reasons our founder launched Houzeo
- The Deed: This document enables the legal transfer of title from the seller to the buyer. Review the documents thoroughly, back to back. Make sure you verify the information including the legal description of the property, the deed book page, and the Property Identification Number (PIN) if any. We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s five other homes worth $680,000 over to the Buyer. There was a huge scramble post-closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
- Statement of Closing Costs: This statement summarizes all the expenses involved in the transaction. This document is easier to understand vs. the HUD-1/Closing Disclosure, but they should tie.
- Certificate of Title: Allows you to state that you have the right to sell the property.
2. Ask Questions When in Doubt. For starters, selling a property can be confusing for you. If you have information or issues that need clarification, ask your closing agent immediately. There’s no harm in asking for help. Before the said closing date, make an appointment with your agent or do some little research about important documents.
3. Bring Two Forms of Official Identification. A licensed notary official will attend the closing and will be the one who is responsible for confirming your identification. Bring with you your valid IDs—your driver’s license or passport. For backup identification, bring a secondary ID as well. Also, don’t forget the keys, garage remotes, final water meter reading, and other key codes for the property.
Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Montana – but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo For Sale By Owner Seller in Montana, we want you to be one of the most educated home sellers out there. Next step, log on to Houzeo.com and list your home for sale by owner. You’ll be in full control of your listing, and save thousands in the process!
Note: This is only a quick guide for all the sellers in Alaska. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.
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